Volume 4, 10 May 2012
TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-126, 2012-126-1, 2012-126-2 and 2012-126-3
Room 200 ABC
105 Princes' Boulevard
10 May 2012
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.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-126, 2012-126-1, 2012-126-2 and 2012-126-3
Crystal HulleyLegal Counsel
Lyne CapeHearing Manager
Room 200 ABC
105 Princes' Boulevard
10 May 2012
- iv -
TABLE OF CONTENTS
PAGE / PARA
12. 7954689 Canada Inc.829 / 5073
13. WorldBand Media, on behalf of a corporation to be incorporated913 / 5646
PANEL OF INTERVENERS
1. The Munk School of Global Affairs, University of Toronto927 / 5747
2. Brian Patterson931 / 5765
3. Anne O’Hagan934 / 5777
14. Tosan Lee, on behalf of a corporation to be incorporated1005 / 6274
1. Korea Veterans Association of Canada Unit 261015 / 6329
15. Trust Communications Ministries1036 / 6480
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PAGE / PARA
Undertaking1066 / 6658
--- Upon commencing on Thursday, May 10, 2012 at 0900
5066 THE CHAIRPERSON: Madam Secretary, I see by the clock on the wall it's 9 o'clock. Can we start?
5067 THE SECRETARY: It's 9 o'clock; we're ready to start.
5068 I just have a few housekeeping matters before we start. Please note that since the transcript of the hearing does not contain the text of video aired during the hearing we would ask that all parties provide one copy of any video presentation to be shown as part of their presentation for the public record.
5069 For applicants who have already appeared, one copy of any video shown must be filed with the hearing secretary by 4:00 p.m. on Thursday, May 10th, which is today.
5070 I would also like to remind all participants that Public Works and Government Services Canada will be conducting a major power shutdown throughout various departments located in our complex. In light of this, our CRTC website access key and emails will not be accessible from tomorrow, Friday, May 11 at approximately 4:00 p.m. until Saturday, may 12 at 10:00 p.m. or until the project is completed. So just keep it in mind if you have undertakings to file.
5071 We're now ready to hear Item 12 on the agenda, which is an application by 79 -- I'm sorry, 7954689 Canada Inc. for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.
5072 I would ask that you please introduce yourselves for the record, after which you have 20 minutes for your presentation.
5073 MR. CONNELL: Thank you very much, and good morning, everybody. On our panel from my left to right is Christian Bourque, an Executive Vice-President at Leger Marketing, Nicholas Tétrault, a managing partner of TTP Media, Mr. Paul Tietolman, also a managing partner of TTP Media.
5074 To my immediate right, Rajiv Pancholy, a managing partner of TTP, Corey Anne Bloom of Raymond Chabot Grant Thornton, Michelle Sarmentio, also of Raymond Chabot Grant Thornton. Steve Kowch is at the far end of the front row. And in the back panel on the far left is Dimitra Maniatis of Leger Marketing.
5075 My name is Jim Connell.
5076 Mr. Chairman, Commissioners and CRTC staff members, on behalf of the managing partners of 7954689 Canada Inc., I would like to thank the CRTC for the privilege and the opportunity of submitting our unique proposal to be granted a licence to operate an FM frequency in Toronto in order to better service the needs of the listeners in the greater Toronto area.
5077 I'm pleased to say that our panel consists of some of the pre-eminent broadcast, financial and creative professionals in Canada. For your convenience, we've included brief profiles of our panel members as an appendix to our presentation.
5078 Ladies and gentlemen, we appear before you today in response to the call for applications to operate a radio broadcasting undertaking on the 88.1 FM frequency serving the greater Toronto area. Our mission is to create a radio station that enhances the choice, the quality and the diversity of talk information programming available to the multitude of cultures represented in Toronto, while expanding the reach of talk information programming to a broader age demographic by broadcasting it where they listen, on the FM band.
5079 You have in the GTA 16 music stations that are part of the PPM survey. There are 11 ethnic stations, one Aboriginal, two sports, one all news, one national information station and two AM talk stations.
5080 Here's what we believe is missing in the marketplace. Plurality of opinions throughout the broadcast day. Live local talk and interactive programming 24 hours a day, seven days a talk. Live local newscasts 24 hours a day, and coverage of community events throughout the week. Contemporary talk for an audience demographic that is currently not being served. An independent new voice in this key market.
5081 In order to develop this vision and to ensure that our concept will successfully meet the challenge, TTP Media commissioned a team of respected professionals from Leger Marketing's Toronto office to conduct not one, but two surveys asking Torontonians how radio and, specifically, talk information radio, could best serve their needs.
5082 At this point I would like to introduce Christian Bourque, Executive Vice-President of Leger Marketing, who will give us a summary analysis of their findings.
5084 MR. BOURQUE: Thank you, Jim.
5085 I'll spare you the reading of the 80 or so pages of reports that you have before you and simply will summarize the research the following way.
5086 Both pieces of research were done with significant probabilistic samples of the GTA population, and our conclusions from those surveys are the following.
5087 Four in 10 listeners in the GTA believe that Toronto talk information radio stations do not cover enough local issues, while more than a third say that these stations are not -- do not broadcast enough local news.
5088 Six in 10 Toronto radio listeners as well say that they would listen to a new talk information radio station presenting controversial, intelligent, provocative local content and investigative journalism on 88.1 FM.
5089 So clearly, a significant proportion of Toronto radio listeners are not satisfied with the current talk radio stations available in the market.
5090 When we looked at the data in greater detail by demographic segments, what clearly stood out to us is that those who tended to say that current talk radio does not meet their needs were among the younger demographic. More specifically, numbers on potential demand for a new talk radio station in the GTA are significantly higher among those 25 to 44 years of age.
5091 Our conclusion is that this younger demographic, who are, traditionally, FM listeners, say that regardless of format, they will not likely switch to FM -- to AM, sorry. Conversely, if we believe that talk radio is or tended to be an older Caucasian male market, it is largely because younger audiences and female audiences are not pushing the AM button on their radio.
5092 MR. CONNELL: Thank you, Christian.
5093 Tietolman Tétrault Pancholy Media will program vibrant, contemporary talk information radio whereby the content and the delivery will meet the needs of Torontonians where they work, in the 416, for the most part, and where they live, in the 905 area code.
5094 Vibrant, active, driven at all hours day and night, that is the reality of Toronto. Toronto's New Talk 88.1 will reflect that reality.
5095 Toronto deserves local live talk programming and news reporting 24 hours a day, seven days a week. And Toronto's New Talk 88.1 will provide it.
5096 With details on how our news and programming will meet our objectives, here is Steve Kowch who, over the course of 14 years, was director of programming at one of Canada's most listened-to news talk radio stations, NEWSTALK 1010 (CFRB) Toronto.
5098 MR. KOWCH: Thank you, Jim.
5099 Tietolman Tétrault Pancholy Media will broadcast live local newscasts 24 hours a day, seven days a week in Canada's largest city. This initiative will provide Toronto listenership with a much-desired service and will also create much-needed job opportunities in the Toronto radio market for both male and female broadcasters and broadcast journalists.
5100 We are committed to hiring a team of 12 full-time local news reporters and an additional four weekend reporters.
5101 A special investigative unit will be created. These investigative journalism specials and mini-series will be featured in our newscasts and talk programming. Regular town hall meetings featuring newsmakers and prominent personalities, allowing listeners to interact and react to their views positions.
5102 A team of eight producers will research and support content development to ensure a contemporary, quality on-air performance.
5103 88.1 FM's talk shows will be hosted by a team of co-hosts. Face to face on-air personalities will express opposing views and interact with listeners on the important issues of the day that are pertinent to Toronto listeners.
5104 The co-host concept permits stating extreme controversial opinions and to broadcast opposing views on the top news of the day, and interacting with listeners ensures a diversity of voices, opinions and endows listeners with a greater choice of content and treatment.
5105 Face to face talk radio allows listeners to hear both sides of the issue being debate. This is not your conventional one host, one opinion, I am right and you are wrong kind of talk radio that exists today in Toronto.
5106 TTP Media will not broadcast pre-recorded shows or American syndicated shows at night and on weekends, but will broadcast Toronto's news talk live 24/7 on 88.1 FM.
5107 Teitolman Tétrault Pancholy Media will also use overnight and weekend programming on 88.1 FM to provide an opportunity for emerging talk and news talent to gain valuable on-air experience working side by side with broadcast professionals.
5108 TTP Media proposes additional, bolder strategies such as providing college and university students a three-hour block of air time Sunday nights to produce and host their own talk shows. Broadcast journalism students will also anchor their own newscasts during those three hours on Sunday night.
5109 When it comes to finding talented writers, journalists and broadcasters from the many cultural communities in Toronto, the place to go is a non-profit organization called Innoversity. This organization creates opportunities to build bridges between the different cultural communities and the media.
5110 Innoversity has agreed to work hand in hand with Teitolman Tétrault Pancholy Media to reach out to the different communities to discover, nurture and coach new emerging talent in journalism and talk radio broadcasting.
5111 Members of ethnic communities and younger listeners will find a stimulating source of talk news programming on Toronto's New Talk 88.1 FM, primarily due to the inclusion of topics that are of direct interest to them.
5112 MR. CONNELL: So that is what we want to do and why we want to do it. What will it take to make this all happen?
5113 TTP Media managing partner Rajiv Pancholy will now speak to the financial arrangements that will make this happen.
5114 MR. PANCHOLY: Well, thank you, Jim.
5115 In looking at a project of this importance we have taken the following steps to be assured of success in this very key venture:
5116 - We have asked Raymond Chabot Grant Thornton, one of Canada's top-tier accounting firms, to perform sensitivity analysis on our projected financials and ensure that we have adequate cash reserves even in the event that our revenue performance is well below projected levels. Additionally, we have asked them to model our projected cash spending, assuming a launch of two Montreal stations, one Calgary station and a Toronto station within a span of 12 months, and make sure that our cash reserves are more than adequate on a combined basis.
5117 - Secondly, it is important to note that we have realized some significant reductions in our cash outflow for the launch of our Montreal stations. These savings of more than $6 million represent an additional cash reserve that we can apply towards our project in Toronto. I am also pleased to report that with every step in the execution of our Montreal project we are realizing savings on many of the expense line items, underscoring our earlier belief that our spending assumptions were conservative and that the actual values are considerably lower.
5118 - For Toronto, the market study performed by Leger Marketing points to a potentially large market share. While we are happy with this potential identified by Leger Marketing and this positive feedback on our proposed format, we have elected to stay very conservative in our revenue projections and assumed revenue per point of market share that is well below the average for the Toronto market.
5119 Based on the above, I am confident that we have done an exhaustive analysis of various scenarios that we could realistically face and that the initial commitment of $42 million by our lenders on a consolidated basis is therefore more than adequate to meet our needs and leaves us with approximately $19 million of available and unused capital in any of the seven years, which is the term of this licence.
5120 Jim, over to you.
5121 MR. CONNELL: Radio broadcasting in Canada plays an important role in the development of Canadian content. TTP Media shares the CRTC's vision and fully commits to the following Canadian Content Development contributions and what we call Responsible Initiatives.
5122 - TTP Media will fully respect the mandatory basic contribution that represents a projected total payment of $267,000 during the first seven years of licensed operation.
5123 - TTP Media will also commit to over and above contributions to third-party organizations approved by the CRTC, amounting to $1.034 million during the first seven-year licence term.
5124 - TTP Media will also be investing and spending an amount of $880,000 over the first seven-year licence term on what we refer to as Responsible Investments that do not meet the definition of CCD initiatives but are clearly creative initiatives that will enhance the development of Canadian content and Canadian talent. The total investment of $2.182 million will also be supported promotionally both on-air and off-air with an additional advertising and promotion budget of almost $2.2 million.
5125 TTP media accepts all of the above commitments as a condition of licence should we receive the approval to serve Toronto listeners on 88.1 FM.
5126 In summary, we are asking for approval to create a new and relevant information radio station for the people of the Greater Toronto Area, one that enhances the choice, quality and diversity of information programming available to the multitude of cultures represented in Toronto while expanding the reach of talk and information programming to a broader age demographic by presenting it where they listen: on the FM band.
5127 We have had Canada's most respected market research organization survey this market and we have heard here today how a significant number of Torontonians are likely to listen to a new talk/information station and, most importantly, contemporary talk and information radio.
5128 Toronto's New Talk radio will attract new listenership and that includes a new, younger demographic audience.
5129 We believe our market share and revenue projections are attainable.
5130 We have the skills, the experience and the management bench strength to execute and implement a project of this scope and importance, and that is to bring a new profound talk/information voice to serve the residents of Canada's largest city:
5131 - A station that will have live local news coverage seven days a week;
5132 - We will put investigative journalism in our news and programming so people will always know the whole story;
5133 - A station that will use the face-to-face concept and total interactivity audience to involve people in intense but balanced debates on the issues that affect them;
5134 - We will take our programming to the streets and dialogue with the entire cross-section of society in both the 416 and the 905 area codes, setting up remote studios and hosting town hall meetings on location to allow people direct access to newsmakers;
5135 - We will create at least 65 new employment opportunities in the GTA and encourage and financially support the efforts of young aspiring broadcasters who will be tomorrow's broadcasting professionals;
5136 - We will reach out to female listeners, members of ethnic communities and younger listeners, who will find a relevant source of talk/information programming on Toronto's New Talk 88.1.
5137 The people at TTP Media and others involved in this project are passionate about talk/information radio.
5138 We are fully prepared, creatively and financially, to share that passion with the people of Toronto with a contemporary talk/information radio station that we know Torontonians will be passionate about as well.
5139 Thank you for your attention and now the members of our team are prepared for any questions you may have.
5140 THE CHAIRPERSON: Thank you.
5141 I would ask Commissioner Simpson to begin the questioning.
5142 COMMISSIONER SIMPSON: Thank you very much. Good morning.
5143 I think I'm going to start my line of questioning on the concept of the particular talk show format and ask you, in looking at your audience projections, they reinforce your argument, it seems, very fulsomely that the marketplace is not being served by the kind of talk that people want. That's the substance of your research and it seems to be showing up in your audience projections, which, to my mind at least, seems to be extremely ambitious.
5144 I guess the first question I want to ask is why do you think it's going to be that easy to pull audience to your particular news/talk format, presumably away from the other three stations in this market? Yet, it seems in your revenue projections that it's going to be significantly longer, I think year four, before you start turning the corner on the profitability.
5145 MR. KOWCH: Well, first of all, sir, nothing is easy when it comes to radio and especially talk radio because it really is improvisation and interaction with an audience.
5146 The issue here is we don't anticipate that we will only take listeners from the current talk stations on the AM dial. The experience in the United States with transfer of talk to FM stations is that they are taking listeners away from people on the same band, on the FM band, as they punch around on the band.
5147 So talk listeners also listen to music and they go to movies and they go to concerts. So because they're on the FM band and they're punching around, they will end up dropping by our FM news and information station.
5148 MR. CONNELL: I think another possible answer to your question, Commissioner Simpson, is that the market research that we have done shows a willingness on the part of Torontonians to search out something new, something that has never before been on the FM band or is not currently on the FM band in Toronto and those audience projection numbers are very optimistic and we like them. When we look at them they are very heartening, I guess, is the word.
5149 However, we based our revenue projections on our personal experiences, I guess, to a large extent in the marketplace and have kept them very conservative.
5150 MR. TIETOLMAN: If I can add one thing, Commissioner Simpson?
5151 COMMISSIONER SIMPSON: Go ahead.
5152 MR. TIETOLMAN: In the research we find that the average person listens to three or more radio stations in a given day. FM radio is primarily music radio, many different music formats. We know that this audience is not being served by talk/information radio. Most of them do not tune into AM radio.
5153 Therefore, to have a commercial broadcaster doing a quality talk/information format, we will basically share audiences with the music formats. We are not going to steal from them, we are not going to take from them, but after they listen to their music and they want to be well informed and they want to participate in an interactive talk format and platform, they will have that opportunity for the first time ever.
5154 COMMISSIONER SIMPSON: Okay.
5155 Moving off of the pure revenue into the PBITs -- and a significant amount of your information filed with the Commission is confidential, so I'm sort of dancing around on lily pads here and I'm sure staff will jump in if I get over the line.
5156 But on your financial projections with respect to your PBIT, is the driving factor to profitability one of a slowness in capturing revenues or the fact that your programming is going to be, as talk has traditionally been, an expensive investment and it's going to take a longer period of time to amortize your programming costs?
5157 MR. PANCHOLY: Commissioner Simpson, I think the answer is both.
5158 We are cognizant of the fact that we are newcomers in this market and we have to be very cautious in terms of what kind of a revenue ramp we assume.
5159 But the other reality, as you rightly pointed out, is that the cost of producing a show of this quality is indeed quite high and we have made a conscious decision not to compromise on that.
5160 COMMISSIONER SIMPSON: Thank you.
5161 While I have you, you had talked about performing a sensitivity analysis. Is that like a stress test? Is that what you're talking about?
5162 MR. PANCHOLY: I will get Corey Anne to comment on that, but I think in my vernacular, yes, it is. Yes.
5163 MS BLOOM: Hi. A sensitivity analysis just means that we have taken 85 percent of the revenues and of most of the expenses. So what we projected for is if there were contingencies in the market, what would the figures look like with an 85-percent base as opposed to 100 percent.
5164 COMMISSIONER SIMPSON: Yes.
5165 Can I get some clarification with respect to how you were looking at managing your cash flows? Not being the brightest penny in the change drawer at times on balance sheets, would you explain to me how you went about your cash flow analysis? Was it based on assumptions of success in all your applications to this format?
5166 You obviously are successful in Montreal, but you have an application pending in Calgary and here. Were your operational costs synergistically spread over all your applications based on certain assumptions or did you take out and rejig your formulas so that you had a worst-case scenario?
5167 MR. PANCHOLY: All of our cash flow projections are based on individual licences, but the common thread that binds them all is that we have a common set of financial institutions that are providing financing to us. So in a sense, from their point of view, they see the consolidated cash that's needed.
5168 But just to reiterate, we did build the models based on each individual licence bottom-up without any regard for synergies.
5169 COMMISSIONER SIMPSON: Okay.
5170 Mr. Bourque, on your very exhaustive analysis you have obviously given the applicant quite a lot of encouragement with respect to the appetite for a different type of talk format and I see the word "potentially" popping up a lot in terms of describing, you know, the expectations -- the potential expectations of the market.
5171 Other than the pure quantitative exercise of testing people, did you have anything else that you pushed your numbers through that you could share with us that aided these optimistic projections?
5172 MR. BOURQUE: Whenever we use survey data to sort of project potential behaviour, we usually say that survey respondents are great at telling us what they currently do and how they feel, but about what they eventually might do, we need to curb down the enthusiasm of respondents a little bit.
5173 So from our basic raw projections, of course the share that we suggested could be attainable by this applicant. We basically needed to curb that down.
5174 We basically looked at the experience of current stations in Toronto, the share, current share of market of the stations here, to basically provide what we thought was a conservative figure for a potential share. So of course we cannot use the raw data and project an audience.
5175 One of our key recommendations was basically to say -- not to consider only taking audience away from the current talk format, but basically say you need to go for this new market that is being sort of untapped here.
5176 And we also looked at past experiences, one of them being the CBC. When they switched over to FM here in the Toronto market, magically their audience became younger, basically because that's where younger listeners are, on the FM band.
5177 So they were able to make that transition and we felt that this application in a way represented this potential of getting a younger target audience listening to talk.
5178 COMMISSIONER SIMPSON: Were you doing qualitative as well as quantitative?
5179 MR. BOURQUE: We did not do quantitative research specifically. We looked at other sources of quantitative data out there, audience measurement and other data available.
5180 COMMISSIONER SIMPSON: Why I asked is in looking at the nature of the questions, it has been my experience that when probing -- doing a gap analysis or probing the idea of developing a new concept, whether it's a consumer good or a service, customers have different ways of describing what they think they are looking for, but it seems that in practical reality the customer never really knows until they have it.
5181 And I'm curious, Mr. Connell and Mr. Tietolman, how you would take -- how the research was leading you to this inescapable conclusion, not just that there was a deficiency in talk format but brought you to the doorstep of the format you are proposing?
5182 MR. TIETOLMAN: We basically took the research that Leger Marketing had prepared for us and, ironically, we sat down with Mr. Bourque and his team of people and we felt that their projection for market share, for example, was very ambitious and we reduced it dramatically. And I'm sincere, dramatically.
5183 That is what we submitted finally to the CRTC, to yourselves, based on a realistic conservative broadcaster's outlook on what we felt we could achieve in a safe, secure manner and match up with our financial capacity to get something done in a quality -- solid quality manner.
5184 COMMISSIONER SIMPSON: Again, bridging programming to research, for the record and for my memory, is this TNT-type format, if I may call it that, the format you proposed in Montreal as well as Calgary, just for the record?
5185 MR. CONNELL: No, not at all, sir. The Calgary presentation was for a music station.
5186 COMMISSIONER SIMPSON: Okay. Yes. Good. That's why I asked.
5187 But in Montreal the format is to be similar?
5188 MR. TIETOLMAN: Yes, and it has been very successful. Number one in Canada in BBM ratings.
5189 COMMISSIONER SIMPSON: Okay.
5190 You had mentioned the 905 versus 416 equation and I'm trying to bridge this to a statement about your research pulling out that one of the major deficiencies, it appears, in the present offerings is that there is not enough local, not enough local issue discussion.
5191 I would like to know, not being a resident of Toronto, although it is my hometown originally, is the 905 still traditionally considered a bedroom community to the extent that the stuff that you would talk about with respect to 416 issues are relevant to 905 commuters because they at least work in the 416?
5192 MR. CONNELL: I would like to get Steve to answer that question. As the Program Director of CFRB for so many years I'm pretty sure he has the answer.
5193 COMMISSIONER SIMPSON: Sure.
5194 MR. KOWCH: When people talk about local, I think when they say there is not enough local, I think those are the people in the 905.
5195 My experience working here in Toronto is we spend more time talking about what's going on in Toronto where people work and not enough time talking about what's going on in the communities where they live, in the communities where they shop, in the communities where they take their children to play sports.
5196 That's why we want to emphasize more local news, not just from Toronto where they work, but to go out into the communities and cover what is going on in Peel, in York, in Durham, in those areas of the Greater GTA.
5197 MR. TIETOLMAN: We plan on opening a satellite studio in this community and these community areas to better service and be closer to the people, as well as a mobile studio that would travel throughout these areas.
5198 COMMISSIONER SIMPSON: Is that -- okay, fine. That's great. I think that's significant.
5199 Mr. Kowch and Mr. Connell, both of you have substantial news/talk experience and it wouldn't be misrepresentative to say that talk has been going through some stress tests of its own over the last few years.
5200 I think CKO was a very interesting exercise because it was ambitious as all get out and didn't enjoy -- it had deep pockets but didn't enjoy the success that I think it perhaps should have as a news station. And CFRB has been going through its trials and tribulations.
5201 Seeing the needle going down on the majority of talk across the country, why is this -- fully understanding that your research is telling you that there is a gap here, what brought you across the chasm to the belief that this is going to work?
5202 MR. CONNELL: I'm not sure that that chasm exists, for one thing.
5203 I believe a large part -- if there is indeed a dip in audience for talk and information radio, and as far as information radio goes and news radio goes, 680 News would probably argue with you that the needle is going the other way.
5204 I think there is more than ever a hunger for news and information. There is a hunger for debate, and fair debate, even-handed debate, on the topics of the day. In this economy, in the political situation in the world, in the economic situation in the world today, I think more than ever people want news and information programming.
5205 I think that traditional stations have disenfranchised a large portion of their potential audience, that being the younger demographic, by not presenting this on the FM band, where these people live and play.
5206 I mean you talk to most -- a lot of very young people today don't even know what AM radio is. I mean it's time that this sort of information was brought to them in the place they live.
5207 MR. KOWCH: I also think, Mr. Simpson, that sometimes we create our own problems in talk radio. And yes, we are going through a transition. Part of the problem is I think people are tired of knee-jerk reaction talk radio.
5208 What I like about face-to-face is when you have two people opposing views, you are at least going to get both sides of the story instead of a conversation that goes like, "That's my opinion, I'm right, you're wrong, thanks for calling."
5209 I believe the needle will move to where it should be because we will be on FM and because we will do more intelligent talk radio than knee-jerk reaction talk radio.
5210 MR. TIETOLMAN: Just one other thing to add to that.
5211 COMMISSIONER SIMPSON: Please. Absolutely.
5212 MR. TIETOLMAN: Surveys and research have shown -- there is a report out there that the top 10 radio stations in North America, including Toronto, are either talk, talk/news, news/talk formats. Nine out of 10 come from that format category. Only one is a music format. In Montreal, FM talk radio is number one.
5213 COMMISSIONER SIMPSON: Yes, no doubt, but Fox News, the CNBCs, and so on, have usually maintained a format where they take a stance editorially and use that as the tool by which they attract like-minded audience.
5214 I want to go further into your idea of not necessarily riding the fence, but being the arena keepers in which the battles are fought.
5215 Do you think that you are going to -- I mean, you obviously do, but why do you think that you are going to be able to attract individuals of opposing views to get in and debate the affairs of the day?
5216 Because, traditionally, handlers of politicians and authority figures do everything they can to keep their principals out of debate, because bad things can happen.
5217 Why do you think this is going to work?
5218 MR. CONNELL: I don't think it's avoidable on their part any more. I think there is so much media scrutiny, so much media intensity, that somebody has to talk to somebody, somewhere, sometime, and once they do, the door is open.
5219 We would like to initiate most of those conversations, but somebody else will initiate them if we don't, and then the door is open.
5220 You mentioned CKO. I used to have finance ministers calling me to look for a platform to express their view, if we were running a story that was negative toward them, of course.
5221 COMMISSIONER SIMPSON: Yes. They are usually looking for a venue, but not necessarily a debate.
5222 MR. KOWCH: I covered politics for four years at the Quebec National Assembly, and I can tell you that my experience with politicians is that very few of them can pass up a microphone.
5223 COMMISSIONER SIMPSON: True.
5224 MR. KOWCH: And if you are doing a good talk show, if you are being fair, you will not have a problem.
5225 If we have the listeners, as we expect and hope to have, we will not have a problem.
5226 It's all about how you present and how you treat your guests when they come on that radio station, and we expect to treat them fairly and ask them tough questions, which is what they expect.
5227 COMMISSIONER SIMPSON: With respect to your audience demographics, there is no doubt that politics has lost a lot of traction in the under 35's. You just have to look at the poll results.
5228 And I commend you for wanting to engage a younger audience in healthy debate, but -- I guess two questions.
5229 The younger market has a tendency to not necessarily want to drink from the well of conventional wisdom and authority, and I am curious as to how your programming is going to feed to that reality.
5230 Are you going to try to run to the opposing views, even if there is debate going on, or are you going to try to have the older authority figures convert their dialogue to a younger market? How is that all going to work?
5231 MR. PANCHOLY: I will ask Christian Bourque to weigh in on this one, but just to introduce the topic from my point of view, if you look at the dynamics of the younger generation -- I see that firsthand, I have two teenage kids. They like to debate the issues on blogs, and it's not so much that that's a medium of convenience, but there is something fundamental going on.
5232 In blogs you can go to the stream and the topic that you believe is relevant to you, whereas today talk radio is not offering that relevance to the demographic.
5233 I think that is the key to our success. If you bring topics of discussion that are relevant to a certain community, the people will listen and use that media.
5235 MR. BOURQUE: My personal belief with the younger demographic -- and, of course, by younger here, we mostly focus on 25 to 44.
5236 And full integration with social media, in terms of interaction on air, of course, will be a key, if you are asking for my recommendation on that.
5237 The second element is that we find that youth do not tend to participate politically the way they used to, in terms of not turning out to vote.
5238 However, talking about local issues, debating local matters, is still something that is very much in vogue. If you walked down the streets of Montreal these past few weeks, you will have noticed that.
5239 So social involvement, if you want -- they are not socially disengaged youth, they basically may have lost the belief that you need to participate in formal politics. That might be two different things.
5240 MR. TIETOLMAN: The same incident that Mr. Bourque is talking about, or a series of incidents -- we are witnessing, for example, the president of a student union, representing 200,000 young people, younger than 25 years of age. When the minister finally extended her hand and said, "Let's sit down and talk," 100,000 -- 200,000 people demonstrations turned into 1,000 people demonstrations, which indicates clearly to us that if we give the people the platform and the relevant chance to express themselves face-to-face with a minister to solve their problem situation, it will work, absolutely.
5241 MR. KOWCH: If I could just add one thing, it all comes down to who is speaking on the radio. If we are going to have just older people speaking on the radio, you are absolutely right, the younger demos are not going to be attracted. But if we have young on-air, talented talk show hosts, the younger people will listen.
5242 My experience at CFRB with putting someone like a Ryan Doyle, a 30-something individual, on the radio -- he has some of the youngest listeners on that radio station because he speaks their language. He has a way of coming up with his opinions that match those of his generation.
5243 That's what we also have to do, and will do, on 88.1 FM.
5244 COMMISSIONER SIMPSON: Picking up on your last words, Mr. Kowch -- but this is a question, I think, for Mr. Connell or Mr. Tietolman -- there may be significant evidence that would convince the Commission that there is a need for a different kind of dialogue in a major market like Toronto, and you have indicated that your audience ambitions, if not skewed or weighted to, they are, at least, wanting to embrace a younger audience, and this is why FM is the solution to that problem.
5245 But the problem I have, that I have to ask, because it's the elephant in the room, is: Is this format -- giving you face value on all of your programming ambitions and analyses -- is that really, in your mind --
5246 And, of course, I know that the answer is going to be yes, but I have to ask the question.
5247 Is it really the best use of this last piece of real estate, which happens to be FM, putting talk on a high quality signal like that?
5248 MR. CONNELL: Yes.
5249 COMMISSIONER SIMPSON: Could you be a little clearer?
5250 MR. CONNELL: Yes, I believe that it is absolutely the best use of FM, and I believe that it is the best proposal in the room right now to deal with FM --
5251 Our application on the FM band is the best choice that you could make.
5252 COMMISSIONER SIMPSON: With respect to Montreal, you are simply working with what you've got.
5253 MR. CONNELL: It's a different market. There was no FM frequency up for grabs at that point, and, technically, Montreal is a different kind of market, too. You can reach your audience on AM easier in Montreal than you can in Toronto.
5254 MR. TIETOLMAN: In addition to that, you have 16 music-formatted stations in Toronto. Most formats are covered. There may be one or two that are not, but amongst all of the applicants this week and next week, not one has brought forward a different, unique music format that is not serving the population currently.
5255 Whereas, with talk radio, aside from Radio One -- and that shows very well in the ratings -- this is something that we think, sincerely, the market is waiting for, and the research proves it.
5256 COMMISSIONER SIMPSON: To get into the programming details a little bit, if you don't mind, this is going to be, from my understanding of your presentation, a news authority as well as a public affairs authority. How are you going to --
5257 Do you mind walking me through how your day parts are going to be broken out? Will the morning and afternoon drive be more news, and talk resides in different parts of the day?
5258 MR. KOWCH: Morning and afternoon drive -- let's break it down first with mornings.
5259 Listeners wake up and they want to know what's happening, but I guess it comes down to what is your definition of news. For me, news is what is of interest to different people. It's like beauty, beauty is in the eye of the beholder. What some people will like in news, other people will say: That's not news, in my opinion.
5260 When we do morning radio, we need to be talking about the events that happened while they were sleeping, and give them information about the events that may have happened the night before, and then give them an opportunity to talk about it.
5261 If it's the day after the Academy Awards, that's probably a good thing to be talking about. The day after one of the biggest TV series comes to an end, people will want to talk about it, because that's what they talk about.
5262 So that's the type of thing that we want to do: what they talk about, what they want to talk about, and also, of course, what we think they should be talking about.
5263 MR. TIETOLMAN: And we are not a 15-minute news wheel. We respect 680News. They do an excellent job, and hats off to them, and the ratings and revenues they produce show that clearly.
5264 I am sure that the Commission must have their revenues per rating point.
5265 COMMISSIONER SIMPSON: So, to paraphrase, the younger market definitely distinguishes hard news from information. Information seems to be the greater portion of their diet, some of which is entertainment, some of which is current affairs and the like, as opposed to the old model of hard news, hard politics.
5266 I am sensing, then, that what you are proposing as an overall theme to the station is discussion that is of a very broad nature, which is more societal, as opposed to within a certain news or political beltway.
5267 MR. PANCHOLY: Commissioner Simpson, just a point of clarity. I think the discussion about the youth segment has dominated our discussion so far.
5268 COMMISSIONER SIMPSON: Yes.
5269 MR. PANCHOLY: But I think the other part that we are missing in our proposition is that, if you look at talk radio, female participation is very low in that segment, and that is equally important and relevant to our application.
5270 So we are focusing on that as much as on youth.
5271 COMMISSIONER SIMPSON: Would you like to elaborate on how you are going to accomplish that?
5272 MR. PANCHOLY: Yes, I will turn it over to Christian, because we have some interesting statistics on female participation in talk radio.
5273 So it will be Christian followed by Steve.
5274 COMMISSIONER SIMPSON: Okay.
5275 MR. BOURQUE: Quickly, the female audience was also something that was of interest in the data in terms of their interest in talk. Usually, female audiences tend to turn away from talk.
5276 This is also why we suggested that it should be talk information and introducing a broader sort of lifestyle, life stage issues into information outside the hard news that you were talking about.
5277 So I think that the mix will have to be different from traditional talk if that female audience has to be converted over to this new station.
5278 MR. TIETOLMAN: News is the news. You can't change the news headline. Talk radio will complement that and extend that discussion in an intelligent manner.
5279 MR. KOWCH: Just like I suggested that in order to play in the sandbox where the younger demos are, we need to do the same thing. Toronto talk radio has very few female talk show hosts. As a result, it's pretty difficult for a bunch of guys to sit around on the radio and talk about things that are relevant to the female audience. For example, Michelle and Corey are here with us.
5280 Michelle, if you were doing talk radio what would you talk about?
5281 MS SARMIENTO: I think what would be relevant for me right now would be personal finance and relationships but that's obviously personal for my situation and life stage.
5282 MR. KOWCH: Corey?
5283 MR. PANCHOLY: This is yours.
5284 COMMISSIONER SIMPSON: This is what they call the ambush interview.
5285 MS BLOOM: I thought the questions were going to come from in front.
5286 I like things that are current, edgy, white-collared crime, fraud. I do like politics as well. Fashion; once again current, edgy, that kind of thing.
5287 MR. KOWCH: This is like that movie Field of Dreams. Build it and they will come.
5288 Put young people on the radio, you will attract younger people.
5289 Put female -- talented females on the radio, you will attract them.
5290 Put members of the cultural communities on the radio, you will attract them because we will be speaking to them about what they care about. That's the key to talk radio.
5291 COMMISSIONER SIMPSON: Mr. Kowch, you are giving me all these segues. It's just wonderful. Thank you.
5292 Because I do want to ask about the proposition of bringing -- I don't want to use the word more amateur talent but I'm very intrigued about your proposition to bring the educational institutions, you know the colleges into the programming mix. And I was wondering if you could -- again, if you are willing to share this.
5293 You know, what's going to be your methodology in terms of how you select your partners on that particular project because I'm sure you are going to get a lot of takers for the proposition of those weekend slots.
5294 MR. KOWCH: Well, I work with a lot of students, broadcast students and broadcast journalism students because I teach at Humber College. I teach at Seneca.
5295 I have seen the talent out there. I have seen the need to provide the new generation, the up and coming generation of broadcasters, an opportunity to get on the air, experience what it's like and to be able to learn in the process.
5296 So our approach is basically -- and I have talked to some of the colleges and universities about this -- is to set up a schedule and say, "Okay, your school, I need some students who want to do talk" and we'll just log it in and schedule it.
5297 We will go to the news curriculum and get broadcast journalism wannabes who are in their second or third year. This is not a question of just putting anybody on, you know. There will be a process where I will be talking to them and making sure, you know that they are ready. And then we will work with them. It's not a question of just putting them on the radio.
5298 But the notion is to provide the opportunity and a nice three block period where they can do this. We are not talking about putting them on at midnight. We are talking about putting them on around nine o'clock or so.
5299 MR. PANCHOLY: Commissioner Simpson, if I may just add to that?
5300 COMMISSIONER SIMPSON: Yes.
5301 MR. PANCHOLY: Just to elaborate in maybe a little more precise fashion, the process is a threefold process.
5302 One is of course making sure people are aware of the fact that we have this program. Then making sure we have the process where you screen all the applicants. And I'm sure we will get a lot of calls and requests for this time.
5303 But the most important part is the coaching, that from the people we select we will spend as a team a lot of time coaching and nurturing them.
5304 And then comes the final step which is, as a formal aviator, I will tell you there comes a time when you have got to hand them the controls. We will do that when they feel they are ready.
5305 COMMISSIONER SIMPSON: Excellent.
5306 Just two more questions and then I'm done.
5307 Just to clarify, you have indicated very clearly that it is your intention to not be doing any repeat broadcasts; that this will be a 24/7 live undertaking. Is that correct?
5308 MR. TIETOLMAN: It's correct, sir.
5309 COMMISSIONER SIMPSON: And are there any potential for brokering or other types of third party that you have considered?
5310 MR. TIETOLMAN: If you can clarify?
5311 COMMISSIONER SIMPSON: Being a very ambitious format of 24-hour news would you be -- it's been a formula, if you like, with some stations particularly in the ethnic community, to offer blocks of programming to other voices, other concerns or organizations. That would not be the case here?
5312 MR. TIETOLMAN: (No audible response / Aucune réponse audible)
5313 COMMISSIONER SIMPSON: Okay.
5314 The last question I have really got -- but I just want to be absolutely clear. We are fine with respect to any concerns or issues regarding CCD?
5315 MS HULLEY: We are not going to ask for additional input.
5316 COMMISSIONER SIMPSON: Fine, okay. Terrific.
5317 I think those are my questions. Thank you.
5318 THE CHAIRPERSON: Thank you very much. I have got a couple of questions and so do my colleagues.
5319 I want to go back to your stress test and the fact that you have identified that in the Montreal rollout you have overachieved.
5320 Can you share with us where the overachievement is? Is it a reduction in costs? Is it increases in revenues?
5321 MR. PANCHOLY: Principally, it is a reduction in costs. To be precise, when we had put forward the Montreal business case we were assuming that to setup the transmitters we would be acquiring land, building our own infrastructure which for AM, as you know, is quite expensive.
5322 What we have actually succeeded in doing is getting into an infrastructure sharing agreement with some of the other operators in the Montreal area.
5323 So therefore we moved from a very heavy CAPEX model to a much more substantive reduced OPEX model which is based on steady lease costs. Those are the principal areas of savings.
5324 THE CHAIRPERSON: And how are you doing on the revenue side?
5325 MR. PANCHOLY: We are doing okay on the revenue side. We are pretty much on track.
5326 THE CHAIRPERSON: You are achieving your forecasts?
5327 MR. PANCHOLY: Well, we have not launched yet.
5328 THE CHAIRPERSON: Okay.
5329 MR. PANCHOLY: But we have some early agreements with potential advertisers and that is exactly in line with what we had projected.
5330 THE CHAIRPERSON: When are you planning to launch?
5331 MR. PANCHOLY: On schedule in September 2012.
5332 THE CHAIRPERSON: Okay.
5333 And it's an AM frequency?
5334 MR. PANCHOLY: That's correct.
5335 THE CHAIRPERSON: And I heard you talk to Chairman Simpson indicating that the Quebec market is a different market than the Ontario markets. So you are looking for an FM frequency here.
5336 MR. PANCHOLY: Yes, that's correct, for here. For Toronto we need an FM frequency.
5337 Technically speaking, there is a technical reason why in Montreal I think, as Jim mentioned, the AM propagation downtown is a little easier. The principal difference with Toronto is the streetcars and the electrical wiring that doesn't exist in Montreal actually lets the AM signals go downtown a little bit more easily, versus that not being the case with as much ease in Toronto.
5338 THE CHAIRPERSON: Have you listened to AM 680 in Toronto?
5339 MR. PANCHOLY: Some parts, yes.
5340 THE CHAIRPERSON: Do they have problems with listenership and audience? They seem to be very successful.
5341 MR. PANCHOLY: Of course they are very successful financially. I mean I don't have access to details in terms of which pockets they are not able to tap into.
5342 So I'm going by the general principle that AM transmission in downtown Toronto is challenging. That is something that has been, I think, mentioned by already competitors here in Toronto.
5343 MR. TIETOLMAN: In addition, the 940 frequency in Montreal is a clear channel frequency and that gives us an opportunity and an advantage. And the fact that there is a lack of competition in the type of program format that we have put together gives us an opportunity to succeed.
5344 THE CHAIRPERSON: If you are not successful in acquiring an FM frequency will you look for an AM frequency in the Greater Toronto Area?
5345 MR. PANCHOLY: No, sir.
5346 THE CHAIRPERSON: Okay. My other question has to do with the revenue forecast, the stress test, and you talked a bit about the 85 percent revenue level and you are still solvent and sufficiently viable.
5347 At what floor are you no longer sufficiently viable? Is it 70 percent? Is it 75 percent? Is it lower than that?
5348 MS BLOOM: Well, we actually put the numbers and ran them through a model and we went -- we looked at the 85 percent and we looked at the 80 percent. At 80 percent they were still positive closing cash balances because our concern was mainly cash flows and liquidity.
5349 So once again, we went down to 80 percent and we still had a positive closing cash balance. We didn't run the numbers lower than 80 percent.
5350 THE CHAIRPERSON: Okay.
5351 MS BLOOM: But there are other buffers in the numbers as well.
5352 THE CHAIRPERSON: But you didn't go below 80 percent?
5353 MS BLOOM: Well, at 80 percent --
5354 THE CHAIRPERSON: Yeah, you are fine.
5355 MS BLOOM: -- there is still positive closing cash balances.
5356 THE CHAIRPERSON: Okay.
5357 One of the things that you have brought forward today on page 6, at the bottom of page 6 of your submission, is some information that was not in your initial application. The fact that you have got an initial commitment of $42 million by your lenders did not show up in your first application to us.
5358 In the initial one you actually had, and I can't quote the numbers, but you had some guarantees of some financial capability that was much lower than that.
5359 So this is new information and, as we said in the opening remarks on Monday, you are not able to enhance your application with additional information that was not in the initial application.
5360 MR. PANCHOLY: If I may just offer a point of clarity, this is not new information, sir.
5361 This number is the consolidated cash available to us across all the projects. The number for Toronto remains unchanged.
5362 THE CHAIRPERSON: Okay. So we go with the number for Toronto because that's what we are looking at on a face value.
5363 Okay. I think that covers it from my end.
5364 Vice-Chairman Pentefountas...?
5365 COMMISSIONER PENTEFOUNTAS: Thank you.
5366 Good morning. The first question: Why is the Greek in the back row? How does that work?
5367 COMMISSIONER PENTEFOUNTAS: A little levity.
5368 Secondly, I heard a lot about dial surfing and the FM dial and how, while they are surfing the FM dial they are going to get to 88.1 TNT and that they will stick there.
5369 My impression was, unless this is a different kind of model, that you know AM was something that you tuned into when you woke up in the morning. And I'm sure that's sort of how CFRA works, and I know that's how CJAD works in Montreal. They turn it on. They leave it on. They are there all day.
5370 The demo obviously is older. That's no secret.
5371 But how do you -- how does this -- explain to me the model whereby you don't wake up and turn it on to 88.1 but you sort of surf your way onto 88.1. If that's the case, how do you stay on 88.1?
5372 And are you going to have sort of pockets of time that people will be listening to 88.1 as opposed to being on it all day?
5373 MR. PANCHOLY: Well, perhaps we didn't clearly articulate what we feel is going to happen.
5374 The proposition is not where we think that people are just going to surf the dial and find us. We certainly hope that's the case in a certain number of cases, right?
5375 But the real issue is the barrier that exists between AM and FM that certain demographics don't exist and will not migrate from FM back to AM for the sake of relevance and for addressing those demographics it is important that we be on FM.
5376 COMMISSIONER PENTEFOUNTAS: Okay.
5377 Maybe more clarification on how you differentiate yourself. You know there is a lucrative market.
5378 I was looking at the market share. It's almost 25 percent of the market between the four news talk radio stations in Toronto, starting from CBC One and going down to CFMJ.
5379 How will you -- there are four different options there already available in Toronto. How do you differentiate yourselves? How do you find your niche?
5380 They have already got close to a quarter of the market. There are different personalities on-air. There are different demographics. How do you differentiate yourselves to get your market share -- and I'm going to get to that later.
5381 MR. KOWCH: I guess, first of all, we need to look at what those other stations are doing and then compare it to what we are doing.
5382 COMMISSIONER PENTEFOUNTAS: Okay.
5383 MR. KOWCH: CFRB does not have live local talk programming overnight. They use a syndicated comedy show after midnight.
5384 640 does not have live local talk programming overnight as well. They air U.S. syndicated coast to coast. It's a show about the paranormal and UFOs.
5385 680 News does not have open line programming interactive with listeners. That's not their format. Their format is a news wheel and they have set times for different news features and traffic.
5386 On weekends CFRB does not have live local programming or even a live local newscast in the evening and overnights. They rely on Canadian press.
5387 Most of the open line programming on CFRB and 640 is made up of one white male host.
5388 Toronto's new talk 88.1 FM will have live local open line programming, interactive with callers 24 hours a day, seven days a week. We will have live local newscasts 24 hours a day, seven days a week.
5389 These are just examples of what we will be doing that some of them aren't doing.
5390 COMMISSIONER PENTEFOUNTAS: And the other stations aren't doing call-in --
5391 MR. KOWCH: Overnight?
5392 COMMISSIONER PENTEFOUNTAS: -- overnight?
5393 MR. KOWCH: No. CFRB has a comedy show for like five hours.
5394 COMMISSIONER PENTEFOUNTAS: Okay.
5395 MR. KOWCH: Because we are on the FM band while its competition is on the AM band, we will have access to the younger demographics that are not listening to AM radio.
5396 Because we are on the FM band there is a greater opportunity to reach out to females who tend to -- as we look at CBC Radio One's audience, they have a lot of female listeners while talk radio on the AM band don't have a lot of talk listeners from female audience.
5397 COMMISSIONER PENTEFOUNTAS: Okay.
5398 MR. TIETOLMAN: And if I can add one thing, sir?
5399 COMMISSIONER PENTEFOUNTAS: Yeah.
5400 MR. TIETOLMAN: Investigative journalism is something that has disappeared from radio and in other media as well. We will be different and we will do something unique with investigative journalism on a regular basis.
5401 COMMISSIONER PENTEFOUNTAS: You bring another point, Mr. Tietolman. Listen, this is an interesting project but very ambitious and very expensive.
5402 You run the numbers. It's not my money. It's your money and if you want to blow it, it's your privilege. But this is a very ambitious and expensive project and when you add sort of the -- first of all, you are going to be live 24/7.
5403 There is not going to be any brokering. There is not going to be any programming coming in from south of the border. And you add investigative journalism into the mix doesn't that seem to you a little unrealistic?
5404 MR. TIETOLMAN: Not at all. I can turn to Mr. Pancholy, the financing part.
5405 MR. PANCHOLY: I think the best way to answer the question is we believe in the project with all its constraints and challenges and also the opportunities. We have taken the time to look at it. We are convinced this is something we can make happen.
5406 As far as the brokerage is concerned, perhaps we didn't answer the question fully. I think the answer that we gave you was limited to: Will we be offering syndicated programming? The answer was no.
5407 COMMISSIONER PENTEFOUNTAS: Okay.
5408 MR. PANCHOLY: But we have not ruled out exporting our content. We believe if you do a very good job that there is ample appetite in the rest of Canada and possibly in the U.S. to really understand what's happening in Toronto.
5409 It is the economic engine. It is the city which has the corporate headquarters. And this information is of relevance to a lot of Canadians.
5410 COMMISSIONER PENTEFOUNTAS: You would derive revenues from the programming on your Toronto channels -- Toronto stations, that is?
5411 MR. PANCHOLY: Yes, we would. Yes.
5412 COMMISSIONER PENTEFOUNTAS: Okay.
5413 And is it Toronto that allows you to be that ambitious? I mean could you do investigative journalism and 24/7 in a medium-sized market?
5414 MR. PANCHOLY: Not with this much credibility, I would say.
5415 If you look at other markets, certainly the size of the markets is a big determinant. Sometimes linguistic duality becomes an impediment to doing this. But in Toronto I think we can make it work.
5416 COMMISSIONER PENTEFOUNTAS: You mentioned female audiences. You already mentioned that a big chunk of your programming philosophy will be face to face debate, perhaps even conflict. And my understanding when I look at sort of sociological studies women don't like conflict. How do you attract them?
5417 MR. PANCHOLY: We actually -- I mean just to deviate a little bit from the discussion I will take some liberty to introduce some humour.
5418 We had a big fight amongst ourselves yesterday where we were debating this issue. The question was: How do you make content relevant and relevant to, for example, females?
5419 I think the answer is a female would likely open up to what he or she feels about the host as a female and other participants are females. It may not work as well. So I think that's the other part of the key.
5420 So we talked about several enablers. I think being on the FM band is certainly one enabler. But having relevant content and discussion of relevant topics with hosts that have qualified and have the trust of the listeners in their domain that is key.
5421 MR. KOWCH: And if I may add, debate, discussion, even heated, doesn't necessarily translate into conflict.
5422 And I understand what you are saying, you know, about the female audience. That is why if you have two people giving both sides of the story it's more inclusive than just one person doing a talk show, their opinion, "You're on. Thanks for calling".
5423 COMMISSIONER PENTEFOUNTAS: Well, I'm a Quebecer. We like social peace. I don't personally like it but it's all about social peace and not getting in conflict.
5424 Listen, the other element is that all of the people that will be coming on to debate, none of these people will be getting paid. Is that right?
5425 MR. TIETOLMAN: No, not to debate.
5426 COMMISSIONER PENTEFOUNTAS: Politicians?
5427 MR. TIETOLMAN: No, not at all.
5428 COMMISSIONER PENTEFOUNTAS: Okay.
5429 MR. TIETOLMAN: The hosts on air are paid, obviously.
5430 COMMISSIONER PENTEFOUNTAS: Okay. I understand that. But none of the people coming on to debate -- I mean it's not going to be an extra cost having all these debates, right?
5431 MR. TIETOLMAN: No.
5432 COMMISSIONER PENTEFOUNTAS: People will come in for free?
5433 MR. TIETOLMAN: They are newsmakers.
5434 COMMISSIONER PENTEFOUNTAS: They are newsmakers, okay.
5435 The Sunday night shows who is going to pay for that airtime? Are the universities going to have to pay or are the students going to have to go out there and find financing, or is that coming out of Tietolman Tétrault Pancholy Media fund?
5436 MR. TIETOLMAN: We our handing the three-hour block over to the students of Greater Toronto.
5437 COMMISSIONER PENTEFOUNTAS: Okay.
5438 MR. TIETOLMAN: And if they so desire they will sell their airtime and they will keep that revenue in that revenue pool for good projects, quality projects for students in the GTA.
5439 MR. KOWCH: It's in investment in the future, sir. It's an investment to provide the opportunity for tomorrow's radio stars to get their start.
5440 COMMISSIONER PENTEFOUNTAS: You are creating a farm club.
5441 MR. KOWCH: Well, the problem is that the media has abandoned its farm teams by using overnights and weekends for syndicated programming.
5442 COMMISSIONER PENTEFOUNTAS: Yeah.
5443 What is Innoversity? Maybe everybody knows, but I don't.
5444 MR. KOWCH: Innoversity is this incredible organization that I have had experience working with. They were able to -- what they do is they link people in the various cultural communities who are broadcasters, documentary producers, writers, with mainstream media.
5445 I have used them on several occasions to find people to do what we call the "Neighbourhoods". There was a five-part series in different cultural communities.
5446 That's what they do. They link -- they help the media find people in the different cultural communities and put them on the radio.
5447 COMMISSIONER PENTEFOUNTAS: Okay. And this is specifically happening in Toronto? This is an organization in Toronto?
5448 MR. KOWCH: Yeah, this is a Toronto organization.
5449 COMMISSIONER PENTEFOUNTAS: Just to get briefly to market share, you are ambitious in your plan and you are also ambitious in your revenues.
5450 I don't have a problem with your revenue point. It is much lower than what we have seen. I think part of that's confidential but it's very conservative. But a 3 percent market share in Year 1, is that realistic?
5451 And I add to that the fact that the Leger study you gave us showed that 5 percent of listeners would listen to the station every day, 5 percent. I mean 43 percent would be interested in it but only 5 will listen to it every day. So that would mean they have to get 3 out of that 5 percent in Year 1.
5452 Now, I know you are called TNT and its explosive radio probably or whatever, but I mean how do you do 3 market share in Toronto in Year 1, guys?
5453 MR. PANCHOLY: I think part of the answer lies in the fact that when you are coming out with a product for which there is a clear market and opportunity it's relatively easy versus being the end force in the market where you have so many other incumbents doing exactly the same thing.
5454 And we would not be nearly as ambitious if it were going in that vein. We would be offering something that was almost the same as what the incumbents are offering.
5455 We are unique. We have looked exhaustively at what the competition is doing today and we feel that there is a very distinct niche that we can tap into.
5456 And on another dimension, I mean, we are not going to be just sitting back and letting people discover us. We are going to do everything to promote ourselves, to show people what we do.
5457 I think, as our expense line shows, we want to invest in the quality programming. We as a team believe that there is absolutely nothing more than you do better in terms of using your money than to create quality content.
5458 MR. BOURQUE: If I may add very quickly, sorry, one of the issues is that a majority of the market listens to three stations or more per day, so I think in terms of getting a three share, which is -- so lower than what the raw figure would suggest -- needs to come from that switching potential that the Toronto market has.
5459 So the reach will be fairly large and if they deliver on the promise in terms of content, then it's just a matter of getting the frequency. But that three percent share is -- to us, seemed conservative and attainable.
5460 COMMISSIONER PENTEFOUNTAS: I was --
5461 MS BLOOM: Sorry, I would like to add to that.
5462 COMMISSIONER PENTEFOUNTAS: Yeah.
5463 MS BLOOM: Sorry. Because if you want to look at the relation between the revenues and the three percent market share, although in the numbers there is a three percent that was used, there's actually a correction factor that was incorporated after the three percent.
5464 So the revenues themselves don't actually reflect three percent. They're corrected for an approximate 30 percent factor of -- I wouldn't -- well, I wouldn't call it a learning curve.
5465 Maybe Rajiv, if you --
5466 MR. PANCHOLY: Start-up.
5467 MS BLOOM: Start-up. A start-up curve.
5468 COMMISSIONER PENTEFOUNTAS: You've created a little buffer for yourselves as a safety zone there in case things don't go as well as you thought they would.
5469 MS BLOOM: That's right.
5470 COMMISSIONER PENTEFOUNTAS: I always ask this question about repatriating audiences, and I think you've partially answered it, the female element, the youth element. And you also talk about, I think, immunities.
5471 Do you want to give me your plan on repatriating listeners back to radio above and beyond what you've already said, if there's anything else you want to add to that?
5472 MR. KOWCH: Repatriating people back to radio. That's something, I guess, I spent 14 years trying to figure out, is every time you lose somebody, how do you bring them back.
5473 I think what it really comes down to, as Rajiv says, it's about the promotion, how we promote the radio station and then how we deliver on our programming.
5474 If people come and don't like what we're doing, you're not going to repatriate them. But if people come and say, "That's different. I like that", then you will bring them back.
5475 MR. TIETOLMAN: I'll just add one thing.
5476 The day after Conrad Black left prison, he's on our station the next morning talking to the Toronto audience. Do you think we're not going to get an audience for that? I promise you, we will impact the market dramatically.
5477 COMMISSIONER PENTEFOUNTAS: Are you going to threaten him on -- how are you going to get him on the station the next day?
5478 MR. PANCHOLY: Mr. Pentefountas, if I may add to the issue of repatriation, I don't think that's quite what we want to do with the youth segment.
5479 The youth segment is a multi-modal segment. They have many different mediums that they rely on for information and discussions and chats, and I don't think we will see a day when radio repatriates them back.
5480 I think what we're looking at is adding to the current portfolio of things because radio is missing from one of those mediums by which they get information.
5481 COMMISSIONER PENTEFOUNTAS: Okay.
5482 MR. PANCHOLY: So just focus on the word "repatriation" and say that's not quite what we're talking about.
5483 COMMISSIONER PENTEFOUNTAS: Okay. I understood your arguments on the younger demo. I understood your arguments on women. You also mentioned cultural communities, ethnic communities. I mean, I don't know what the appropriate word is, but we've heard some proposals on third and second generation Canadians.
5484 What's the plan on getting some of that market share to 88.1 New Talk?
5485 MR. PANCHOLY: As you can tell from my generic tan, I'm a first generation immigrant, so I can talk about the issue with some degree of personal knowledge.
5486 Immigrants, and especially new immigrants, have different interests, different concerns, different issues. It's not just a linguistic and cultural issue. They have different kinds of topics of concern to them.
5487 And if you don't know what those issues and concerns are, you cannot deliver to them pertinent and relevant programming. So the challenge we have and the plan we have is to make sure we have representatives from those communities driving and designing those shows. And that's the only way you'll get to basically deliver content to them that's of relevance to them.
5488 And I'll just keep underlining the word make it relevant, and that's how you address them.
5489 COMMISSIONER PENTEFOUNTAS: But you'd have to sort of embed people from your staff and teach them one of those communities. Is that --
5490 MR. PANCHOLY: On the contrary; we'll embed people from those communities into our staff.
5491 COMMISSIONER PENTEFOUNTAS: Tomato, tomahto. Okay.
5492 Thank you, Mr. Chairman.
5493 THE CHAIRMAN: Thank you.
5494 Commissioner Patrone?
5495 COMMISSIONER PATRONE: Thank you, Mr. Chairman.
5496 I appreciate your presentation this morning.
5497 Ms Bloom, you said you like your talk edgy. I'd like you to define what that means. And the second part of that question is why you think that's missing from Toronto's talk radio landscape, whether it's the result of excessive political correctness or whether it's just plain bland right now?
5498 Can you answer that for me, please?
5499 MS BLOOM: If you don't mind, I'm going to answer the second part first by telling you I'm actually here more for my financial knowledge than the Toronto market knowledge, so I'm going to defer that part of the question to somebody else on the team.
5500 What -- if I'm going to go back to the first, what I consider edgy is, once again, is anything that's current, so anything that's -- that would be relevant to me but current, like right away. Like in the news when I mentioned white collar crime, that's really a hot topic. When I mention fashion, well, for me, anyway, that's a hot topic. So things like that.
5501 Does that properly answer your question?
5502 COMMISSIONER PATRONE: No, but thanks for trying.
5503 To me, edgy has a connotation and I just wanted your explanation or your ideas about what would constitute edgy on your particular station.
5504 MS BLOOM: Okay. Well, I'll try to answer --
5505 COMMISSIONER PATRONE: Thanks.
5506 MS BLOOM: -- a little better for you.
5507 Once again, edgy, for me, is current but it's also not necessarily confrontational, but something that's in the spotlight and that you can debate about or discuss about, that you get different points of view but there's an intelligent, rational, current discussion or debate on.
5508 COMMISSIONER PATRONE: And that's missing right now, in your view?
5509 MS BLOOM: Once again, I'm going to have to defer that to somebody else on the team.
5510 MR. KOWCH: Edgy. You can be edgy and still not turn people off.
5511 I think edgy means like, you know, you're pushing to the limit. And if you cross the line, some people may say, "Well, that's really edgy" while other people will say, you know, "That's not what I'm interested in".
5512 You have to be fearless if you're going to be a talk show host, and when you're fearless, you can be edgy.
5513 COMMISSIONER PENTEFOUNTAS: I noticed on page 5 of your oral in the second paragraph where you talk about co-host's concept permits stating extreme controversial opinions, and words like "extreme" jump out at me.
5514 Do you think that there's an atmosphere currently where the talk radio market, if you will, is, frankly, lacking in a sense of -- in the kind of divergence of opinion that you seem to be referring to?
5515 MR. KOWCH: I think you have less opinion on a station if you have one host doing a show, so when we can say "extreme" -- when you have two people discussing, maybe even getting into a heated argument but you have two people -- if someone crosses the line, the other person can bring them back and say, "You know, that's not -- you know, you can't say that" or "I think that's a racist comment" or what have you, and you deal with the problem immediately on the air rather than have to deal with the Canadian Broadcast Standards Council a month later.
5516 It allows -- it allows people to have their extreme opinions and be tempered by the other side of the argument.
5517 COMMISSIONER PENTEFOUNTAS: Okay. Well, thank you very much, Mr. Kowch.
5518 THE CHAIRPERSON: Thank you.
5519 Commissioner Poirier first, and then Commissioner Menzies.
5520 COMMISSIONER POIRIER: This is going to be an icebreaker. I'll speak in French, so if you need a translation device, please use it.
5521 Alors, je suis toujours un peu surprise de voir que parfois, on est pour la bande AM et parfois on est pour la bande FM pour faire de la nouvelle parlée.
5522 À Montréal, on le sait. Les Québécois veulent de plus en plus entendre des nouvelles parlées sur la bande FM.
5523 Cependant, on nous a toujours dit que le marché anglophone préférait la bande AM pour de la nouvelle parlée.
5524 Alors, j'aimerais que vous m'expliquiez comment vous pensez que culturellement parlant, la population de Toronto va être prête à accepter que l'on fasse de la radio parlée sur les ondes FM.
5525 M. TIETOLMAN : Pour commencer, Madame Poirier, on peut témoigner le fait-même que Radio-Canada, la raison un de ce succès, a une part de marché considérable et impressionnante sur la bande FM en anglais, à Toronto.
5526 C'est sûr, Montréal c'est pas Toronto, et vice et versa. On sait bien qu'on peut dire de deux façons qu'est-ce qui arrive avec la radio AM/FM Montréal, versus AM/FM de Toronto. Il faut jouer avec les faits. Il faut jouer avec les circonstances.
5527 C'est sûr qu'on croit sincèrement, parce qu'on a témoigné ça partout que s'il y avait pas un choix sur la bande FM pour la radio parlée/informations, on peut remplir ce rôle et on peut le jouer de façon importante avec succès.
5528 M. TÉTREAULT : Si je peux continuer, Madame Poirier. La réalité québécoise n'est pas la même que la réalité à Toronto, autant au niveau du nombre de fréquences disponibles en français et musicales, et autant au niveau de stations francophones qui offrent de la musique du contenu de radio parlé.
5529 À Montréal, il n'y en a pas de concurrence. Il y avait qu'une station...
5530 CONSEILLÈRE POIRIER : Mais ma question traite sur Toronto.
5531 M. TÉTREAULT : Oui, je comprends, sur Toronto. Mais vous faites allusion à pourquoi il y a des gens qui favorisent le AM parlé et d'autres le FM.
5532 À Toronto, on a trois stations très fortes de radio parlée sur la bande AM, il y en a pas sur le FM à part Radio-Canada.
5533 Et si on veut se différencier des stations concurrentes avec un contenu jeune, novateur, qui rejoint une clientèle cible qui n'a pas été rejointe, si on regarde toutes les analyses, visiblement par les compétiteurs sur la bande AM...
5534 CONSEILLÈRE POIRIER : Oui.
5535 M. TÉTREAULT : ...la bande FM se trouve un outil extraordinaire pour nous en vue d'offrir quelque chose qui va se différencier de la concurrence.
5536 CONSEILLÈRE POIRIER : Alors, je vais donc préciser ma question. Je pense que ce sera à peu près la première fois dans le plus gros marché du Canada qu'on donnera une licence parlée en anglais.
5537 Alors, j'aimerais que vous m'expliquiez pourquoi ça va marcher à Toronto alors que nulle part ailleurs au Canada anglais, cela n'a été testé avec succès.
5538 M. TÉTREAULT : Nous allons toujours innover côté radio pendant des années. Nous croyons sincèrement, à cause qu'il y avait tellement de monde à l'écoute, la radio FM, de bande FM à Toronto, la démographie qu'on cherche, qu'on peut gagner. Ils vont chercher les choses, mais ils vont jamais syntoniser la radio, bande AM. On sait bien.
5539 Puis, on peut retourner la question à Bourque, il pourrait peut-être alimenter les informations sur ça.
5540 M. BOURQUE: Il y a un élément démographique pour le marché de Toronto. C'est que souvent, on dit que les personnes en avançant en âge changent leurs habitudes.
5541 O.K. Ils vont peut-être changer le type de musique qu'ils vont écouter, mais ça veut pas dire qu'ils vont nécessairement changer leurs habitudes pour se tourner vers le AM.
5542 En fait, souvent, quand on teste, les jeunes n'aiment pas le son du AM, n'aiment pas la sonorité.
5543 Donc, plus on va avancer, ou plus ces jeunes-là vont avancer en âge, qu'ils vont devenir le coeur du marché de Toronto, on va devoir les rejoindre sur le FM, parce qu'ils n'iront pas sur le AM éventuellement.
5544 CONSEILLÈRE POIRIER : Oui. Et j'ajouterais donc, un changement de culture, pour moi, voudrait dire que quand même, ça doit prendre du temps. Amener les gens à changer d'habitude et je trouve vos pronostics de part de marché très élevé.
5545 Monsieur Pentefountas l'a dit, trois pour cent la première année, mais huit parts de marché la septième année, c'est ce qui est plus que presque toutes les radios parlées.
5546 Alors, quand on veut changer la culture, il me semble, ça prend du temps et on ne peut pas avoir justement des pronostics aussi optimistes.
5547 M. TÉTREAULT : En tout respect, je les trouve pas optimistes, nos scénarios. On a fait, pas un sondage, on a fait deux sondages qui sont extrêmement révélateurs. Et on a consciemment réduit nos parts de marché.
5548 Mais vous comprendrez aussi qu'outre l'aspect part de marché, il y a une réalité. On est en affaires.
5549 Qu'est-ce qui est important en affaire? C'est de générer des revenus, des dépenses, d'avoir de la rentabilité. Mais on a aussi une obligation sociale envers la population législative en vue de donner à la population un service.
5550 La radio parlée, c'est un service. C'est une plus value qui offre vraiment de l'information et tout. Donc, c'est notre produit, on y croit.
5551 M. TIETOLMAN : Et si nous allons frapper à la septième année une bande de marché de cinq au lieu de huit par exemple. Quatre ou cinq. On va atteindre nos objectifs de vente à 100 pour cent, ce qu'on a prévu.
5552 CONSEILLÈRE POIRIER : Parfait.
5553 Mon deuxième sujet, c'est le fait que le CRTC veut toujours s'assurer que quand il y a un nouvel arrivant, que cela ne mette pas dans une position dramatique ceux qui sont déjà présents.
5554 Par exemple, vos projections de revenus de publicité pour les radios déjà existantes, c'est d'aller chercher 18 pour cent de leur revenu.
5555 Quelle est la part du AM et quelle est la part du FM dans cela? Est-ce que vous l'avez fait, cet estimé-là?
5556 M. TÉTREAULT : Il y a un aspect aussi qu'il faut comprendre. Et c'est pas vrai, la prémisse, en tout respect, elle est fausse. Et elle est « arguable ».
5557 On peut complètement dire que oui, il y a tant de revenus X sur la balance des revenus générés par la radio. Mais c'est complètement mettre de côté tous les revenus disponibles au niveau publicitaire, dans l'assiette publicitaire des téléviseurs, la publicité internet...
5558 CONSEILLÈRE POIRIER : Mais ma question est précise.
5559 M. TÉTREAULT : Oui, elle est précise, mais la base de votre question ne correspond pas à la réalité, dans le sens que oui, on veut se différencier des trois stations AM, oui, on va être des concurrents. Mais on va être des concurrents dans une niche à part et on va être sur une bande à part. Donc, on va prendre peut-être oui, un pourcentage des revenus des stations AM. On va prendre aussi des FM.
5560 CONSEILLÈRE POIRIER : Oui.
5561 M. TÉTREAULT : Mais notre vision d'affaires n'est pas de se limiter au revenu de la radio, mais à l'assiette publicitaire totale de la grande région de Toronto.
5562 CONSEILLÈRE POIRIER : Oui, mais j'ai devant moi les chiffres. Vos prévisions sont de 1.2 million provenant des radios existantes, ce qui correspond à 18 pour cent de vos revenus.
5563 Ma question est, quelle part allez-vous chercher des revenus du AM par rapport aux revenus du FM et est-ce que vous avez des chiffres?
5564 M. TÉTREAULT : Écoutez. Si vous posez cette question-là en tout respect à n'importe qui ici, ils peuvent vous dire n'importe quel pourcentage.
5565 Mais comment peut-on savoir hors de tout doute, qu'on va apporter dans deux ans, on va prendre 20 pour cent des revenus de la radio AM de ce 18 pour cent-là, et c'est 80 pour cent du FM. C'est complètement hypothétique comme question. Et vous donner une approximation va valoir juste une approximation.
5566 Dans l'équilibre de la balance, ce qu'il faut comprendre, c'est le projet global. On a des parts de marché peut-être ambitieuses. Mais on a des revenus très conservateurs, très conservateurs.
5567 CONSEILLÈRE POIRIER : Je regarde, et pour nous, ça paraît gros, les revenus de nouveaux publicitaires est équivalent à la deuxième année à trois millions, ce qui 45 pour cent de vos revenus vont être de nouveaux revenus.
5568 Ça aussi, c'est pas tellement conservateur par rapport à l'ensemble des demandes qu'on a eues. C'est beaucoup plus élevé que cela.
5569 M. TÉTREAULT : Exactement. Et c'est ça la manière de faire des affaires.
5570 On est pas une structure où il y a une série de stations de radio partout qui a la même équipe de vente, qui propose, qui fonctionne de la même manière.
5571 La force qu'on a, c'est qu'on est une équipe jeune, dynamique, et qu'on a un énorme réseau de contacts et qu'on peut vendre - on a des manières novatrices de générer des revenus. Et pourquoi se limiter à la même manière de faire pour générer ces revenus-là?
5572 CONSEILLÈRE POIRIER : Alors, ma question va se préciser. Comment allez-vous faire pour aller chercher 45 pour cent de vos revenus chez de nouveaux publicitaires, même si dans Toronto, l'économie va bien?
5573 M. TIETOLMAN : Pour commencer, Madame Poirier, si on regarde l'enveloppe publicitaire dépensée dans la grande région de Toronto à chaque année, Stats Canada, les chiffres de CRTC avaient quelque chose comme deux milliards six cent cinquante millions de dollars dépensés par les annonceurs pour le marketing, la publicité, l'annonce à la radio/télévision, (inaudible), Transit, etc.
5574 Si on n'est pas capable de ramasser une petite partie d'un pour cent là-dedans...
5575 CONSEILLÈRE POIRIER : Monsieur Tietolman?
5576 M. TIETOLMAN : Oui.
5577 CONSEILLÈRE POIRIER : Expliquez-moi votre stratégie pour aller chercher 45 pour cent de nouveaux publicitaires. Do you have a strategy?
5578 M. TIETOLMAN : Ah! Mais c'est ça, notre stratégie. Si vous voulez, on peut vous soumettre ça dans les prochains jours.
5579 CONSEILLÈRE POIRIER : Non, non.
5580 M. TIETOLMAN : On peut pas commencer à parler de stratégie de vente juste comme ça.
5581 CONSEILLÈRE POIRIER : O.K. O.K.
5582 Mais vous avez une stratégie.
5583 M. TÉTREAULT : Absolument.
5584 CONSEILLÈRE POIRIER : Parfait.
5585 M. TÉTREAULT : Juste, en tout respect, puis l'important c'est que oui, on sait exactement comment faire. Mais ce qu'on veut dire exactement tout de suite dans les détails devant tout le monde, à nos concurrents, qu'est-ce qu'on veut faire!
5586 CONSEILLÈRE POIRIER : Non, non. Ça, je le comprends. Mais vous me confirmez que vous avez une stratégie.
5587 M. TÉTREAULT : Oui, absolument.
5588 CONSEILLÈRE POIRIER : Parfait. C'est ce que je voulais savoir.
5589 Yes, if you want to add on this.
5590 MR. PANCHOLY: Yes, I would like to add to that.
5591 If you look at basically the revenues that are coming to competing talk stations in Toronto --
5592 COMMISSIONER POIRIER: Yes.
5593 MR. PANCHOLY: -- it's very revealing.
5594 Some of the stations that are basically doing news, they're getting a lot of revenues from traffic reports and they're part of a bigger conglomerate, so their source and their way of actually getting to revenues is very different from what we have to do.
5595 If you look at our format and we say we're going to have a show discussing a certain topic in detail, the people who are interested in that are very different from the people who do normal radio advertising. These are not the retailers. These could be bigger corporate houses, which are traditionally not radio advertisers.
5596 Talk about a bank. If you're going to have a show and basically have a lot of discussion on the current economy and economic affairs, you may find one of the top five banks might want to sponsor that, who would typically not be spending revenues in advertising on local radio. And that is the key difference between our strategy, and that's why the percentage is different.
5597 M. TIETOLMAN : Il faut pas oublier une chose aussi. Les annonceurs à Toronto sont des auditeurs en même temps.
5598 Et quand vous avez un client qui peut vous écouter et aime bien que vous diffusez en ondes, ça devient un annonceur, une cible très facile et beaucoup plus facile de vendre une campagne publicitaire. Et on a preuve pour ça.
5599 CONSEILLÈRE POIRIER : Merci beaucoup. C'est tout, Monsieur le Président. Merci. Thank you.
5600 THE CHAIRPERSON: Okay, thank you very much. That completes our examination of your application.
5601 Hang on. We've got a follow-up question.
5602 CONSEILLER PENTEFOUNTAS : Si vous me permettez. D'abord à Montréal, pour retourner à Montréal brièvement pour suivre le questionnement, la ligne de questionnement de ma collègue, la première chaîne était « Première », jusqu'au moment où 98,5 commence à diffuser sur la bande FM.
5603 On a fait ce changement-là. Et il y avait de la concurrence sur la bande FM. Et ça a produit des résultats à Montréal.
5604 Oui, je comprends que c'est pas le même marché, mais c'est en partie...
5605 M. TIETOLMAN : Radio un fonctionne bien à Montréal côté programmation et côté sondage. Et le 98,5 fonctionne très bien en même temps.
5606 CONSEILLER PENTEFOUNTAS: Et 98,5 est en train de manger le lunch de... au niveau des BBM ou des cotes d'écoute.
5607 M. TIETOLMAN : Oui, mais il faut pas oublier une autre chose. Il faut regarder honnêtement la situation.
5608 Le gouvernement du Canada en ce moment a fait les coupures dans les budgets de la programmation d'autres choses à Radio-Canada.
5609 Il y a des personnages en onde très, très connus et très solides. Comme (inaudible), je pense qu'il n'est plus là. Peut-être il revient une autre journée, on sait pas. Mais quand on modifie la programmation qui est un succès, on va souffrir vraiment, directement et facilement et très vite avec l'auditoire qui écoute. C'est ce qui arrive.
5610 CONSEILLER PENTEFOUNTAS: Et est-ce que les stations à Toronto, traditionnelles, ont réussi à aller chercher de la clientèle publicitaire? C'est-à-dire des sous des comités culturels?
5611 M. TIETOLMAN : Ça, on a pas fait l'étude. On a pas fait l'étude, mais j'imagine, les gens dans les (inaudible) ont les mêmes besoins et les mêmes idées dans un certain sens. Pas tous à 100 pour cent, mais dans un certain sens, que le marché at large.
5612 Même chose que je veux mentionner en même temps, qu'on a oublié, étant donné qu'on est ici pour une demande de licence, c'est incroyable. Et on est fiers d'une chose. Certains de nos projets soumis dans la demande sont déjà copiés et utilisés par certaines stations électroniques dans des PTA.
5613 On est très fiers de ça, puis on est déjà une attaque, une influence sur le marché productif à Toronto.
5614 CONSEILLER PENTEFOUNTAS: Mais comment faites-vous pour concurrencer contre ce genre d'attitude? Parce que vous êtes pas prêts à lancer votre station avant...
5615 M. TIETOLMAN : Monsieur Pentefountas, pour chaque idée, nous avons soumis... on a dix autres idées encore mieux.
5616 CONSEILLER PENTEFOUNTAS: O.K.
5617 M. TIETOLMAN : Vous prenez ça.
5618 CONSEILLER PENTEFOUNTAS: Dernière question que j'ai oublié de poser. Va-t-il y avoir des synergies entre Montréal et Toronto?
5619 M. TIETOLMAN : Il y aura bien sûr correspondant à Ottawa, par exemple. Il y a certaines choses dans la gestion de l'entreprise.
5620 CONSEILLER PENTEFOUNTAS: Non, mais des synergies entre le ou les stations de Montréal et les...
5621 M. TIETOLMAN : Oui. Oui.
5622 CONSEILLER PENTEFOUNTAS: ...potentiellement une station à Toronto?
5623 M. TIETOLMAN : Sûrement. Dans la gestion, l'équipe de gestion, c'est sûr qu'on peut servir à plus que (inaudible).
5624 Deuxièmement, côté ventes et marketing, on a aussi un genre de combined effort qu'on peut faire là-dedans vis-à-vis certaines autres fonctions correspondant à Ottawa.
5625 On n'a pas besoin d'engager les deux. On peut avoir une personne solide qui pourrait fournir l'information quotidienne à toutes les stations, même.
5626 CONSEILLER PENTEFOUNTAS: Et d'autres synergies au niveau de la programmation?
5627 M. TIETOLMAN : Pas vraiment, non. Sauf si on voulait discuter une fois de temps en temps, de faire un échange. Et je peux donner la parole à Steve Kowch, parce qu'il a déjà fait ça.
5628 Il a gagné, comme on dit, national awards for broadcasting Montreal, Toronto content.
5629 MR. KOWCH: I think, sir, that what would happen, for example, with all the unrest in the student population, instead of relying on Canadian Press to feed us reports from Montreal that are heard on all the other stations here in the market, we would use our own people to do that type of reporting, just like if something major happened in Toronto, we would provide the information and reports to Montreal.
5630 COMMISSIONER PENTEFOUNTAS: But I also recall CJD and CFRB simulcasting at some point.
5631 MR. KOWCH: Yes.
5632 COMMISSIONER PENTEFOUNTAS: Is that --
5633 MR. KOWCH: We did a simulcast for a town hall meeting on same-sex marriages. We did a simulcast when it came to the inauguration of President Obama because as the national director of the news talk format for Astral, we were looking for ways of using each other.
5634 So we would -- you know, rather than take all our staff in Toronto and send them to Washington, we would cherrypick and take some of the best people across the chain to participate and also give them more experience.
5635 COMMISSIONER PENTEFOUNTAS: Okay. Thank you.
5636 Using each other in a good way.
5637 MR. KOWCH: Yes.
5638 MR. PANCHOLY: We will actually cross-feed if the issue is relevant in both cities at the same time.
5639 COMMISSIONER PENTEFOUNTAS: Yeah.
5640 Okay. Thank you.
5641 THE CHAIRPERSON: Thank you very much. We'll take a break for 15 minutes.
--- Upon recessing at 1037
--- Upon resuming at 1058
5642 THE CHAIRPERSON: Madam Secretary...?
5643 THE SECRETARY: Yes. Music, please. All right.
5644 We will now hear item 13 on the Agenda, which is an application by WorldBand Media, on behalf of a corporation to be incorporated, for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.
5645 I would ask that you please introduce yourselves yourselves for the record to begin with and you will then have 20 minutes for your presentation.
5646 MR. SHEA: Good morning, Mr. Chairman, Commissioners and Commission staff. I am Kevin Shea in the back row here, Chairman of the Board of Directors of WorldBand Media Inc., OBCI.
5647 I would like to introduce the team that will be presenting this application to you today.
5648 Sitting directly in front of me is Prabha Selvadurai, President and CEO of WorldBand Media; to his left, Judy Tapp, General Manager; to her left, Carey Davis, Chief Operating Officer; to Prabha's right, Alyssa Schwartz, Chief Content Officer; and then Pierre-Louis Smith, our Regulatory Advisor.
5649 In the back row, to my right, is Brian Patterson, President and CEO of the Ontario Safety League. Next, Mr. Robert Steiner, Director of the Munk School of Global Affairs, and then Anne O'Hagan of AOH Communications. These three are interveners.
5650 Next is Chris Lecomte, TOUCH's Financial Advisor, and then Dr. Gerry Wall, our Senior Strategic Business Advisor.
5651 Now, to my right is Soroopi Shan, TOUCH's Project Manager, and finally, Brian Thomas, member of the Editorial Advisory Board.
5652 I am very very proud of my association over the past four years with this exciting and innovative company. I have watched this young telecom engineer cum entrepreneur, my friend Prabha, shape and execute an exciting media vision for WorldBand.
5653 From its head office right here in Toronto, this company is now operating radio stations in a growing number of U.S. markets. Today we present the next chapter of that vision, a multiplatform FM radio application for an all-English news/talk station for what we call this New Toronto.
5654 I will now turn it over to Prabha and our team. Thank you.
5655 MR. SELVADURAI: Thank you, Kevin.
5656 Bonjour, good morning, Mr. Chairman, Commissioners and Commission staff, and thank you for the opportunity to present our proposal to you today.
5657 I was barely 21 years old when I had the good fortune to come to Canada from a war-torn Sri Lanka. I embraced this country and it embraced me. More than anything else, my parents wanted me to have a good education. Canada gave me that: access to undergraduate and graduate studies at an outstanding university, with a good scholarship.
5658 Today, with my wife, we are raising our family here in English and in French. This is our home and I am absolutely dedicated to continue to build a great media company right here in Toronto.
5659 We believe that with your help we will make history. The time has come for Toronto to have its private English FM news/talk station. We propose TOUCH FM based on the compelling logical market realities, market dynamics and good public policy.
5660 MS TAPP: Good morning, Chairman, Vice-Chairman, Commissioners and Commission staff, I'm Judy Tapp, General Manager of TOUCH FM.
5661 Let's get right to the question: How can the last available FM frequency best serve Toronto?
5662 The answer is very clear: Toronto needs its first private FM news/talk format, not another music format.
5663 With due respect to other applicants, approval of another music format would squander and misuse the market's last FM frequency.
5664 Here's why...
5665 We all know that music listening is moving away from FM to iPhones, iPads, Androids and online. Hence, the overall FM audience is shrinking.
5666 We know that in markets all around us, in the United States, in Mexico, in Europe, FM stations are abandoning music formats and converting to news/talk formats to try and reverse the declining audience trend.
5667 We know the facts reported in CRTC data indicate that from 2006 to 2010 listening to music on radio in Canada has fallen 10 percent as listening to spoken word formats has increased by 8 percent.
5668 And there are more facts that we know. Music listening is down in Toronto and all across the country even though over 100 new music stations have been licensed between 2003 and 2010.
5669 We know that in Toronto the 18-54 demographic segment is the largest demo in the Toronto market at 52 percent. Women and visible minorities are the largest groups within this demographic.
5670 This is the New Toronto.
5671 We know the New Toronto is not listening to older male-skewed programming of Toronto AM radio talk formats.
5672 Ipsos research provides clear evidence that the largest demo in this market, the New Toronto, is looking for an intelligent news and talk station.
5673 We know that Ipsos research shows strong interest for a New Toronto news/talk station that is:
5674 - younger, inclusive, intelligent and independent;
5675 - living local, not just talking about it;
5676 - interactive from inception; and
5677 - integrated across all Web and mobile platforms.
5678 We call this radio station TOUCH FM.
5679 MR. SELVADURAI: Thank you, Judy.
5680 And who are we?
5681 WorldBand is the New Toronto in ownership and in management. Our company culture is all about delivering inclusive, innovative and intelligent content.
5682 To this proposal we bring the experience and commitment of a strong team, along with outstanding strategic partners dedicated to make it all happen.
5683 Let's hear from them.
--- Video presentation
5684 MS TAPP: I have worked in Toronto media, notably in media sales and marketing for more than 20 years and I am very confident in this business proposal.
5685 As you have seen in this video, I'm not the only one. TOUCH FM is driven by innovative ideas, ideas that ignite enthusiasm in veteran and savvy media figures like Doug Knight and Erica Ehm.
5686 Ipsos research shows that young people don't typically listen to AM radio and that occurrence is widespread across North America. AM's core constituency is 55-plus. FM is younger; 18-49 year olds devote 86 percent of their radio time to FM.
5687 The business case for supporting this proposal rests on numerous validated assumptions, including two tiers of comprehensive market research.
5688 First, Ipsos conducted field research to determine which of a group of different FM formats was preferred by respondents.
5689 Second, Ipsos did a demand study testing the programming proposed by TOUCH FM.
5690 The results are clear. Younger Toronto audiences, women and visible minorities show strong interest in TOUCH FM.
5691 This New Toronto audience is looking for an English-language news/talk radio station that serves as an on-air and online conversation hub.
5692 The research leads us to conclude that a strategic and intelligent radio service can reverse the downward decline in radio listenership in Toronto.
5693 In Toronto, the supply of private spoken word radio is nonexistent on FM and markedly lower overall when compared to other North American markets.
5694 It's time for a new independent radio voice for Toronto and it is hard data and research that confirms this opportunity. TOUCH FM is that new voice. It is the one proposal amongst all the applications before you that will do what no other can: bring in new audiences to radio.
5696 MS SCHWARTZ: Good morning. I'm Alyssa Schwartz, Chief Content Officer at TOUCH FM. My career has taken me from traditional media to the digital space, where I led the editorial redesign and relaunch of msn.ca, one of Canada's biggest news online portals.
5697 TOUCH FM will create a new participatory style of radio that enhances and extends the text conversations that are already widely happening on social media platforms and enhance them with the emotion that comes with the on-air conversation of human voices.
5698 This is what we refer to as the conversation hub. It's a democratic meeting place where the diverse conversations of social and digital media in Toronto's communities can come together with TOUCH FM as the centerpiece.
5699 Our research tells us the future of FM radio in large markets is information-based, interaction-driven, multiplatform content.
5700 TOUCH FM is spoken word radio that is many things, but here's one thing it definitely isn't, it isn't angry old guys yelling at each other.
5701 Toronto's demographic reality, the New Toronto, is shaped by the 25-49 age group, with a median age of 38, and predominantly this population comes from outside of Canada.
5702 In mainstream radio are their conversations being heard? Are we serving them? Are we speaking to them? Most importantly, are we involving them? Not in English, no, were not.
5703 It's time for a new inclusive, intelligent and independent radio voice for Toronto, and TOUCH FM is that new voice.
5704 It is the one service amongst all of the applications before you that will do what no other can. It will bring in new audiences to radio and increase the engagement in our city.
5705 The New Toronto audience will be able to connect with TOUCH FM on their BlackBerry, on their iPhone, on their Android, in the kitchen, in the car, wherever they are. TOUCH FM will provide local Toronto news, regular weather, traffic, sports, and then the conversation begins. That is TOUCH FM.
5706 What's different about TOUCH FM? Let me give you five highlights:
5707 - for starters, we are an independent editorial perspective provided by New Toronto ownership and management;
5708 - a democratic editorial decision-making process driven by New Toronto online and on-air audiences;
5709 - programming conceived from inception to engage Web and mobile media audiences and FM news/talk listeners;
5710 - live programming from neighborhoods across our city every day;
5711 - content accountability sessions held in communities across the city to encourage face-to-face feedback and discussion.
5712 And that's only the beginning of TOUCH FM. There's much, much more.
5713 As Chief Content Officer let me tell you about my top priority. Success in radio and for all the digital extensions is not driven by technology, it's driven by people.
5714 My priority will be to find, develop and grow diverse local Toronto talent, both on-air and off the air. We will recruit and train to bring the voice and content of the lively, intelligent and engaging online discussions to air.
5715 Based on the research we are confident that this is what the New Toronto wants, programming that can best be described in just four simple words: inclusive, interactive, independent and intelligent.
5716 Thank you.
5717 MR. DAVIS: Good morning. I'm Carey Davis. I have 30 years of experience in managing news/talk stations in small and major markets across North America, including here in Toronto as a consultant on the successful design and launch of 680 News 19 years ago. Now, I'm Chief Operating Officer of WorldBand Media's SiriusXM satellite radio news/talk channel in Spanish.
5718 TOUCH FM will be on the air live 24/7, with a minimum of 22 hours of hard news programming every week, and 75 percent of that will be purely local. I like to think of it as all Toronto all the time across all platforms.
5719 We won't be satisfied just about talking about the city. TOUCH FM will literally live in Toronto's neighbourhoods and communities.
5720 We will hold content accountability sessions across the city to encourage face-to-face public feedback.
5721 TOUCH FM will define a new, vibrant, participatory and inclusive Canadian radio model.
5722 We thoroughly understand how a successful multiplatform service can be built around radio, and to achieve that our integrated system will ensure:
5723 - that online content consistently makes its way into on-air programming;
5724 - that on-air listeners can drill down for more and unique content by going online; and
5725 - that this conversation that we are talking about never ends, it's on-air, online or onsite.
5726 TOUCH FM is built around a carefully conceived stand-alone business model.
5727 On top of that, to enhance our content, marketing promotion and revenue opportunities, Commissioners, we have established outstanding strategic alliances.
5728 Our partnerships with legacy media icons "Toronto Life" and "Toronto Sun" give us extended reach, instant credibility, gravitas out-of-the-box in programming, marketing and sales synergies.
5729 We struck a novel arrangement with "iPolitics" to ensure TOUCH FM's audiences receive Toronto-specific perspectives on political news from the nation's capital.
5730 Alliances with online media such as Erica Ehm's "YummyMummyClub" and other bloggers will keep our radio listeners and multiplatform users engaged and connected.
5731 Why are these successful content partners so interested in working with TOUCH FM? Well, we saw it in the video and the answer is simple: They understand we will broaden their reach.
5732 Commissioners, I would like to change gears for one second and say a word about this question of the frequency signal impairment of 88.1.
5733 There is no doubt that a very compelling case supports the view that 88.1 should be awarded to a spoken word format. Like CBC Radio One, TOUCH FM will not need stereo. A clear mono signal significantly improves the audio quality of the signal, including the .5mV contour. Bang! From a technological standpoint this is the best way to go.
5734 MR. SELVADURAI: Thank you, Carey.
5735 Commissioners, before we close, I would like to recap our CCD initiatives.
5736 WorldBand Media will invest $1.75 million over seven years -- and that's over and above the basic annual requirements -- to support the Community Radio Fund and to support and develop Canadian radio broadcasters of the future, with particular emphasis on talented women, the youth and Canadians from ethnic communities.
5737 In conclusion, Toronto's younger audiences and its female and visible minorities, the New Toronto, are basically ignored by existing talk radio services.
5738 We see a compelling future for spoken word on FM in a dynamic combination with social media. They are natural media extensions of each other's reach and influence. And as a design engineer in broadcast and wireless technology, I can assure you that we will fully leverage tomorrow's technologies and today's technologies of smartphones, the next generation of wireless devices, to fully maximize the power of radio.
5739 Approving this application will introduce an independent new voice for the Toronto of tomorrow. We have experience and ambition, a solid business plan and an equally solid financial backing.
5740 Commissioners, we know that this hearing is proceeding under the skies of a recently announced transaction involving Bell and Astral. If anything, there should be more appetite now to introduce new blood into the system. In an age of consolidation of newsrooms and shrinking numbers of broadcasting voices, by approving this proposal you will be introducing a new player with a new independent voice in local news, information and conversation.
5741 Furthermore, assuming we have the honour of receiving your approval, we have every intention of seriously exploring any and all radio acquisitions or new licence opportunities that may lie ahead.
5742 Thank you for this opportunity. Merci sincèrement. We wait for your questions.
5743 THE SECRETARY: Thank you, sir.
5744 We will now hear your interveners in support.
5745 I will just remind the panel that they have 10 minutes collectively.
5746 You may now proceed with your presentations.
5747 MR. STEINER: Thank you.
5748 Bonjour, Monsieur le Président, membres et employés de la Commission. Je m'appelle Robert Steiner. I am Robert Steiner and I am Director of the Fellowships in Global Journalism at the Munk School of Global Affairs in the University of Toronto.
5749 With me today are Anne O'Hagan of AOH Communications, on my left, and Brian Patterson, President of the Ontario Safety League, on my right.
5750 We appreciate having the opportunity to be here today to tell you why each of us thinks TOUCH FM should be granted last FM licence in Toronto, but before I get to my reasons I want you to know that each of us is a proud supporter of the TOUCH proposal.
5751 Each of us thinks that WorldBand Media is a unique applicant with the potential to really be a game changer in Toronto media and one that will help ensure this city's place at the cutting edge of smart journalism around the world.
5752 I asked to appear before you today, Commissioners, because the Munk School of Global Affairs at the University of Toronto is pioneering a new way to cultivate outstanding journalism.
5753 Our Fellowship in Global Journalism is the first program anywhere in the world that recruits true experts in complex disciplines and teaches them to break news in those disciplines as reporters and in so doing deepen the quality of journalism serving Toronto, Canada and, as our international partners would attest, serving media around the world.
5754 We have just finished recruiting our first cohort of eight Fellows who will begin the program in September 2012. They include a Professor of Criminology who will learn to break news on crime and policing, a Professor of Engineering who will learn to break news on sustainable energy and technology, a Canadian scientist who is both a Rhodes Scholar and a Commonwealth Scholar who is returning to Toronto from Oxford because she wants to learn how to break news on environmental issues, climate change and science, and we have a lawyer who has worked at the Library of Parliament who will put her public policy expertise to work as a reporter on public policy in law.
5755 As we indicated in our support letter, our goal is to improve the coverage of complex disciplines like the environment, technology policy, migration and economics and to deliver that coverage to the Canadian media and media around the world in a nonpartisan way. In the process, we aim to raise Toronto's visibility as a global centre for outstanding journalism and serve Toronto deeply as a global city in its own right.
5756 We are excited to partner with WorldBand. The partnership would give our Fellows a unique platform to break news and to engage Torontonians directly on how to improve the coverage of stories that are vital for this city as a global city.
5757 Because the format focuses on engaging Torontonians deeply in well-thought-out conversations about important issues that affect their daily life, it lets us do something very different with journalism, something that is currently breeding exciting experiments in the U.K. and the United States but not yet very much in Canada, and that's called open journalism.
5758 Open journalism is practised in the U.K. by "The Guardian" and in the U.S. by a chain of local media called "Journal Register." It invites the audience to help shape coverage itself in an ongoing and sophisticated dialogue with journalists.
5759 To do open journalism well, you need two things: especially knowledgeable and humble reporters and especially thoughtful and engaged audiences.
5760 We at the Munk School will come with the reporters. WorldBand's application for 88.1 is the first broadcast application I have seen capable of generating that audience.
5761 Eighty-six percent of Torontonians listen to FM radio, but what we are talking about is the segment of that audience, the growing segment that wants to do more than just hear it passively in the car or at work. This is the portion that wants to help shape the content and collaboration with smart journalists.
5762 It is, as you have heard, the very opposite of shock talk, it is the very opposite of old folks yelling at each other and is not just another music station, it is a game changing idea that Torontonians deserve and that WorldBand has already pioneered elsewhere.
5763 Thank you very much for your time this morning, Commissioners.
5764 I will now turn the floor to my colleague, Anne O'Hagan. Anne...?
5765 MS O'HAGAN: Thank you, Robert and good morning, Commissioners. Bonjour, messieurs et Mesdames. Ça me fait plaisir d'être là aujourd'hui.
5766 My name is Anne O'Hagan and I am a communications professional and, like Robert, I asked to appear before you today to lend my enthusiastic support to WorldBand's radio licence application.
5767 I am here today to endorse WorldBand's plans to be the most interactive and hyperlocal news/information/talk radio station in Toronto.
5768 WorldBand's programming is designed to generate strong local and community-based content and deliver that content to Torontonians of all shapes, sizes, colours, through multichannels, namely of course radio, mobile and the Web.
5769 Now, I realize that other applicants are proposing to deliver their content using these platforms as well, but World Band's approach is different. WorldBand will be interactive every hour of each broadcast day. They aim to be Toronto's conversation hub.
5770 What's more, WorldBand proposes to interact with their listeners on several levels: through telephone polling, listener interviews, commentary and ideas posted on the Web site, as well as email and in-studio participation.
5771 Even more unique is WorldBand's intent to incorporate location-based services, allowing listeners to receive information on their smartphones from products and services featured on-air or from TOUCH's many sponsors.
5772 The details of the proposals, which I'm sure you are familiar with, are set out in paragraphs 236 two 241 of WorldBand's supplementary brief.
5773 I would also like to note that as an active volunteer tutoring high school students in the Toronto community of Regent Park, where the New Toronto couldn't be more apparent, I see firsthand the value of being connected through informative media and its potential transformational effects on all members of our community, especially Toronto's youth, future journalists included.
5774 As a woman, I am particularly excited about TOUCH FM's plans to produce programming that will address topics and issues that women deal with every day, both as mothers and working professionals. This will fill an obvious gap. I am not aware of any other talk station that devotes significant airtime to topics that are meaningful and relevant to women.
5775 What is also exciting about WorldBand's proposed programming is that it is designed to attract women of all ages and occupations. There are a number of talk radio stations in Toronto that respond to the tastes and interests of men, for example all-sports talk. It is time for a station that responds to the tastes and interests of women like me. That station is TOUCH FM.
5776 Thank you, Commissioners, and I will now turn the floor to my colleague, Mr. Brian Patterson.
5777 MR. PATTERSON: Thank you, Anne.
5778 Commissioners, I echo the positions expressed by my co-panellists in terms of the journalistic and community-building values that TOUCH FM's news/information/talk radio station would bring to the FM dial in Toronto.
5779 I am here today to talk to you about the value of public safety education, the Ontario Safety League's core mandate since 1913, and the power that radio has to communicate important safety messages that fall outside of the realm of what we would call emergency alerts but are just as essential.
5780 I know you are thinking any radio station could broadcast programs geared towards public safety messages, and you're right, but the truth is that outside of public safety announcements, whether mandated or volunteer, public safety issues really don't get a lot of airtime.
5781 They do in the shock jock world where using a safety message or a new piece of legislation is an opportunity to create a bit of a punching bag or to excite listeners who take a position that is, let's say, less than safe.
5782 We want to change that and we think that the news/information/talk station is the best venue to disseminate critical information about safety.
5783 We fully endorse WorldBand's application for a news/information/talk format station and are anxious to partner with them in those areas.
5784 Here's why.
5785 The audience WorldBand seeks to attract sustains listenership from young working Torontonians and second- and third-generation Torontonians from ethnic backgrounds, and women, including working and stay-at-home moms. This demographic does not listen to AM radio stations, if they are listening to radio at all.
5786 WorldBand wants to change that and we think their innovative programming and blue-chip journalistic reporting will attract and intrigue listeners.
5787 If TOUCH FM is approved, which we hope they are, we expect to work very closely with them and their news desk to work public safety tips and stories into their news programs, stories like the benefits of using winter tires for example or teen drinking issues that come up on a weekly basis, or managing an elderly parent or a loved one with Alzheimer's.
5788 TOUCH FM will be a platform to inform, educate Torontonians about important municipal, provincial and national legislation impacting their safety. This is just the beginning, but I think you get the picture.
5789 I'm confident that with the bright and innovative minds at WorldBand we will manage to weave safety news and information about many facets of public safety into their programming.
5790 The 88.1 signal reaches the core of Toronto without signal degradation. This cannot be said for AM stations. In an emergency other AM radio stations may not be in a position to broadcast life-saving information and FM stations may be insufficiently focused on breaking news.
5791 TOUCH FM has an opportunity to become a beacon and a lifeline for Torontonians for critical information, including public safety information.
5792 Another interesting feature about TOUCH FM's application is its ability to send in-car messages that display on most car consoles. For example, TOUCH FM could broadcast tornado warnings, snowstorm warnings, road closures. This is a feature that is only available on the FM dial and it's one that can save lives, much like the Amber Alert you are familiar with.
5793 With TOUCH FM's interactive features the messages we transmit and the conversations we start will be discussed and debated. This is what we want. We want the conversation and the debate because it shows that people are thinking about the subject and absorbing the message.
5794 I think that you will agree with me when I say that you cannot have enough community awareness when it comes to public safety, but the Commission's mandated public service announcements that drive home safety messages only address it to a point.
5795 Don't get me wrong, I'm not suggesting that they are not effective. However, our intent is to work with WorldBand to develop new programs that allow a safety topic to benefit from a more fulsome discussion, certainly one that is longer than 15- or 30-second spots.
5796 The Ontario Safety League supports the introduction of a news/information/talk station on the FM dial. We agree that the trends in Canada and around the world suggest that news and talk are gaining traction and may be the impetus necessary to repatriate listening back to the radio.
5797 I think the Commission should approve TOUCH FM's proposal because it will result in the best value of frequency, increased tuning, add diversity to the news voices and the ownership diversity in the market, and it will provide an important platform for the content such as public safety messaging and related issues.
5798 I thank the Commissioners and their staff and we are now prepared to answer any questions you may have.
5799 THE CHAIRPERSON: Thank you all very much.
5800 I would ask Commissioner Menzies to begin the questioning.
5801 COMMISSIONER MENZIES: Thank you. Thanks for your presentation, it's very interesting.
5802 I have a number of questions, so I'm going to ask you beforehand to try to be precise with your answers because I'm sure my colleagues have some questions too, and we will get squeezed. Anyway, just fair warning, if I cut you off I'm not trying to be rude, just I have heard the answer and I will move on to the next one.
5803 First of all, you talk quite a bit about multiplatform and that. Are you a new media platform with a radio portal or would you be a radio station with a social media platform?
5804 MR. SELVADURAI: Thank you, Commissioner, for the question.
5805 We are a radio station and we are a radio company. We know the power of the FM. On the same theme, we understand what the feature is, so we wanted to make sure from the get-go we have all the multiplatforms integrated into the FM. That's what we are trying to do.
5806 COMMISSIONER MENZIES: I'm interested -- my next question is regarding youth. We heard that earlier, too, but one of my questions is -- I'll just try to put a little bit of context.
5807 Years ago prior to new media, people could only engage in the public square either through a talk show, through a letter to the editor in a newspaper, maybe getting interviewed on the street or on TV. And then the blogosphere opened up and they can chat through Facebook, Twitter, that sort of stuff.
5808 There's an argument out there that says that young people have gone there, away from legacy media I will call them, and they are not coming back, that that is their new home and the best you can hope to be is an annex onto that home. I would like your response to that argument.
5809 MR. SELVADURAI: Thank you for the great questions.
5810 Before I pass it on to Alyssa as to how we plan to integrate them, if you're interested, but I will answer on a high level. That's what we want to do, we want to bring the younger audiences. And then we know they have moved to other nontraditional platforms online. How do we bring them to the on-air is our whole proposition.
5811 In our proposition we say the conversation is happening everywhere, online, on the ground and everywhere, but they are happening without a voice. We feel when you give the voice on an FM they will come home for the relevant information.
5812 I will ask Alyssa to expand, if you are interested, on how we expand.
5813 MS SCHWARTZ: One of the things that we are seeing happening online is, yes, there's tons of conversation, youth are incredibly engaged online, but one of the things that tends to happen is people follow people on Twitter who share their opinions, they read blogs that reflect the things that they already think. What's happening is we are becoming in a way more entrenched and siloed in our views.
5814 What TOUCH FM wants to do is we're building a hub and a bridge between these communities. We are bringing together these different conversations. There are commonalities that are happening across different communities.
5815 For example, one of the recent cuts in Toronto was to garbage budgets for nonprofits and charities. What does that mean? I mean that sounds like a line item.
5816 Well, in Regent Park it means that Central Neighbourhood House, which provides afterschool programming to youth, their garbage bill is now the equivalent of a staff member. You may have in another community a community kitchen where their garbage -- most of their food is donated, their manpower and volunteer, but their garbage bill now ends up being a massive operating cost.
5817 These conversations are happening individually and in silos and what we want to do is really tap into all of the different things that people in Toronto are talking about and bring them together in a way that really embraces this common experience that we all have living in this city.
5818 MR. SHEA: Commissioner Menzies, if I may, because I think it truly is the question of the market these days -- and I will be fast.
5819 My daughter Jamie just came back on Monday night after spending four years at McGill and we were having dinner and she said -- she grew up in media, she went to the YTV daycare with me. She said: "Daddy, what are you working on?" And I said: "We're actually working on an FM radio station application. We have a CRTC hearing." And she said: "What's FM?"
5820 And my daughter's a media kid, but clearly, young people have left AM and FM radio -- not for good though.
5821 There's two things that I ask you to think about, and that is -- as I say, if you really want to understand Toronto get on our subway system because it's a different Toronto underground than it is above ground. What I mean by that is the ethnic diversity. What's amazing is every kid has something plugged into his ear. Many of them are listening to podcasts of content that is of interest to them.
5822 The issue is there is no content that is inclusive and targeted at them, which is why we specifically went after the partnerships of "Toronto Life," of "Toronto Sun," of "iPolitics," authorities in content.
5823 Today, with media with kids it's about being social, it's about being -- it's about talking and it's about being interactive.
5824 And I will close with this: Today old media drives new media, new media drives old media. You can now see that Facebook and Google are going to be buying conventional advertising in old media. Wow! What a turnaround!
5825 The connected car and the smartphone with FM capacity -- in the next couple of years, the connected car, young people driving those cars --
5826 COMMISSIONER MENZIES: Ten seconds.
5827 MR. SHEA: -- is all about interacting.
5828 COMMISSIONER MENZIES: Ten seconds. Thanks.
5829 MR. SHEA: I'm finished, sir.
5830 COMMISSIONER MENZIES: Okay, thank you.
5831 Yes, I take the train and nobody listens to the radio, but you're right, everybody is plugged in.
5832 I heard the word "intelligent" a couple of times and I heard the word "gravitas" and I'm curious about how you will make that work. I will use an out-of-country programmer as an example just because I don't want to use anybody in country, but of course I never watch any out-of-country programming anymore.
5833 But going back years, CNN when it first launched was highly intelligent and had a lot of gravitas and had people from diverse backgrounds discussing international issues and was in international places and it was very compelling and it made no money at all.
5834 And over the years it changed. And it changed to what some critics would describe as basically two old guys shouting at each other. And then it changed to two noisy women shouting at each other. And then it became more inclusive and had a woman, an older guy and an African-American guy shouting at each other. And it made money with people shouting at each other, where it didn't make money with intelligence and gravitas.
5835 To me that's your huge issue. Putting on a discussion between Jack Mintz and Jim Stanford on economic policy may have a lot of gravitas and intelligence, but I'm not sure anybody is going to stop when they are scanning through the dial to listen to that, and I would like to hear you address that as specifically as you can in terms of how you make yourselves enlightening and informative and entertaining without being pure infotainment.
5836 MR. SELVADURAI: First, I will ask Carey to talk about what radio is about and then I will ask Alyssa to talk about how we intend to do the intelligent in an entertaining way so people will listen to it.
5837 So I will ask Carey to talk about what drives the news, talk and information.
5838 MR. DAVIS: Right.
5839 The change that's going on in all the markets right now is this shift to news/talk on FM, and the reason for that is music is leaving. FM is losing steam and the music stations are going down in ratings. And so we have a situation now that nearly every week, every month, another station in North America, FM station, switches to news/talk.
5840 Three days ago in Philadelphia, 106.9 became available, they could choose any format they wanted to, there is no AAA in Philadelphia, there is no blues, and they switched to news/talk. This is now happening in eight out of the top 10 markets in the States.
5841 The reason stations are doing this is that they see an opportunity. Instead of going narrow niche like another music station, they are going big, all sports, all news, sports/talk.
5842 COMMISSIONER MENZIES: Okay. To be specific, my question is: How do you make gravitas -- how do you build an audience with gravitas?
5843 MR. DAVIS: Well, a combination of a great local news department and great people working together, with great partners like Sun and Life working together.
5844 MS SCHWARTZ: Let me give you a couple of examples of stories that we would have in a newscast.
5845 The first thing I want to say is, when we say intelligent we don't mean boring. We plan to get away from the theoretical and into really cool examples that are lighting up our city.
5846 For example, if you want to talk about the entrepreneurial movement in Toronto, there's really no better example than what's happening -- what we are seeing with food trucks across our city. You know, the city tried to implement a top-down solution to that a few years ago with the food cart. They licensed six food carts across the city, and it fell flat.
5847 What we are seeing -- what we are now seeing is a grassroots movement where entrepreneurs across the city have embraced this food truck concept that we are seeing in the States, we are seeing it in Vancouver, we are seeing it in Calgary.
5848 We haven't seen it in Toronto because it wasn't allowed, and yet, because of Twitter and because of the knowledge of these food trucks, which are really local mobile businesses that are giving Toronto fabulous lunch options, you know, they are setting up in private parking lots on the weekends and bringing families out.
5849 That's a really cool example if you want to talk about an entrepreneurial story in this city, and it is something that people on Twitter or people on Facebook are massively engaged with, but it hasn't really reached the mainstream.
5850 So we are going to tell these stories with really powerful, compelling, local examples.
5851 COMMISSIONER MENZIES: Okay. How will you -- specifically, what sort of ideas do you have in mind or plans do you have in mind to engage people in these multiple conversations?
5852 As was mentioned earlier, we tend to adopt our median sort of psychographic cultures these days because we always think the smartest people are the ones that agree with us, so that's where we go, but to have a healthy community you need places where people with contrasting ideas can debate them and respect -- empathize with each other's moves.
5853 Like your presentation is to engage audiences that aren't currently engaged in news/talk, I understand that, but what specifically do you do to engage those audiences? How do you get a conversation going between somebody from Regent Park and somebody from Bay Street and somebody from the Markham area, for example?
5854 What is going to draw them in?
5855 MS SCHWARTZ: Let me tell you about a role that we have on our team -- three roles, actually, and they are called community managers.
5856 If you take a look at Appendix 4, we have identified -- and this is really just scratching the surface. These are 150 Twitter influencers in Toronto. They are ranked by a service called Klout, which measures so-called influence online. That is the number of followers they have, the likelihood of their followers to take action, whether it's clicking on a link or attending an event, based on what these people say.
5857 These three community managers will be on staff. They will primarily be interfacing with the digital community, but they are also going to have an important seat at the programming table.
5858 What they do is, in some ways they act like a show host. They are interacting with, they are posing questions, they are engaging these influencers and their followers all the time. This role will be staffed all day and on the weekends.
5859 So they are fostering these conversations. They are building relationships with these people. They are talking to our partners' followers. They are bringing those stories to the table. They are finding the best tweets and comments on our website. They are finding people who have repeatedly posted really interesting and insightful comments, and inviting them to be part of our conversation on the radio.
5860 We see this as a really seamless process. As Carey said, online feeds radio and radio feeds online.
5861 COMMISSIONER MENZIES: What would be the marketing statement on the side of a bus that would say that?
5862 You don't have to answer right away, you can get back to me. I don't like to necessarily put people on the spot, and it is a bit of a "Gotcha".
5863 MS SCHWARTZ: It goes back to the conversation hub. We are building a conversation hub. Our online conversations are really driving what you are going to hear on the radio.
5864 COMMISSIONER MENZIES: Okay. Thanks.
5865 Just the next step -- and I was curious about the relationships with Toronto Life and iPolitics and the Toronto Sun. It kind of relates to -- there are multiple levels of diversity when you are having a conversation that you need to talk about, and one is engaging people from different cultural backgrounds and people with different histories and people of different races and that sort of stuff, but there is also intellectual diversity.
5866 I am guessing that you have engaged those partners to try to ensure that you are covering the full breadth of intellectual discourse, and you can either confirm that, or deny it, or say: Mr. Menzies, you have no idea what you are talking about. Let me explain.
5867 MR. SELVADURAI: You have exactly hit the nail. We wanted to make sure that we include -- that we be inclusive of every idea, and this is just the start of our partnership building.
5868 You want us to show some examples as to how we reach out to them. I will just give you the stats on one of our partners, why we selected Toronto Life.
5869 As you can see from Doug Knight, Toronto Life has more than the Globe and the Post to put together their audiences, and their audiences exactly match our target audiences, and from 25 to 54 they have so many possible audiences.
5870 So the conversations happening there, we want to bring them, and conversations happening in an intelligent and entertaining way. I mean, they have stories, very in-depth analyses, investigative journalism. We want to bring them here and give them a voice.
5871 And just to answer your former question of how you bring your people with intelligent -- I will give you an example. We understand radio, and the content has to be entertainment. The first filter is entertainment. Then we will go to the intelligent.
5872 Even though the CBC doesn't cover the audiences that we are, in the local way that we are covering, I would say that CBC is intelligent talk, and they have the largest share of the market. So that shows that intelligent talk will attract people.
5873 COMMISSIONER MENZIES: I understand.
5874 Your relationship with iPolitics, Toronto Life and the Toronto Sun, is it a commercial relationship or is it a cross-promotional relationship, or both?
5875 MR. SELVADURAI: We have an initial agreement as to what areas we are going to work on. They are content, marketing and promotional partners.
5876 And we have signed an initial LOI, but once we get the licence, we will do a full agreement. It is going to be a synergistic partnership.
5877 COMMISSIONER MENZIES: Okay. Thank you.
5878 What specifically -- and I need a specific, if I can -- would be different about your newsroom?
5879 When you talk about adding diversity, I want to challenge that a little bit.
5880 When there are this many radio stations and television stations and newspapers in a single market, adding two more people to the scrum doesn't necessarily add much to diversity.
5881 So what would you add to the diversity of news coverage, other than one more guy in the scrum with a microphone?
5882 MR. SELVADURAI: Commissioner, as we said in our opening presentation, we represent the new Toronto. The age group that we are targeting is 18 to 54, the female audiences, and the visible minorities.
5883 And our hiring practice will truly reflect our target audience and Toronto.
5884 And on how we intend to hire, and what are our other policies and everything, I would ask Brian, our advisory committee person, to comment on that, please.
5885 MR. THOMAS: Thank you, Prabha.
5886 Commissioners, I bring to this table 35 years of experience in radio broadcasting, a five-time news director for other markets, other than Toronto. I was with a major company here, CHUM-FM and CHUM, for 32 years.
5887 I have seen this city grow tremendously, and change tremendously, in all of these 35 years.
5888 What the market needs is an exciting new radio station that reflects the communities that are now underserved, and those communities definitely involve the visible minority communities, and women, and young people, who have abandoned talk radio.
5889 The newsroom of TOUCH FM will reflect all of that with a combination of professional people in the key areas, who have experience, and also we are bringing into the radio broadcasting spectrum, for the first time, people who perhaps have not had actual broadcasting experience, but people who reflect those communities, have something to say, can communicate, and can be trained.
5890 Now, in addition to my work as a news director --
5891 COMMISSIONER MENZIES: I understand that, and I am not diminishing it, but, to be fair, my question was: What would be the question --
5892 Having people from different backgrounds, I am not arguing that that's not of value. My point is, having another person of a different background, a more representative background of Toronto, is a good thing. Putting them in the scrum with everybody else would add diversity to the scrum, but I am not sure that it would change the report that came out of the scrum.
5893 Do you know what I mean?
5894 You have 16 mics in there; everybody gets the same clip, right?
5895 So, if there is one more person in there, what is different that comes out of it onto your radio station? What do I hear that's different, as opposed to what do I see that's different?
5896 MR. SELVADURAI: Commissioners, as I said earlier -- thank you for the question -- you will hear the real Toronto. You will have people from (inaudible) doing the mainstream stations.
5897 If we need to, we could ask Brian -- he is currently teaching 50 students from outside the country. We will have them on-air. We will give them the training.
5898 But we won't just hire them because they represent that community or this community, we will go for the merits, the quality and skill sets.
5899 But we will represent them in our staffing structure, and we will give them a program.
5900 For example, if we are doing a female show, Erika Ehm could be hosting the show.
5901 That's our mandate, and if you are interested in how we are integrating those stories into our morning shows and everything, Alyssa can go through it, if that's what your question is, Commissioners.
5902 COMMISSIONER MENZIES: Okay. Thanks. I am going to move on to a couple of other things now.
5903 You mentioned it at the end of your remarks here today, but I need to ask this -- and you have heard it before.
5904 Last year the CRTC amended section 15 of the Radio Regulations so that 15 percent of all basic CCD contributions must be directed to the Community Radio Fund.
5905 Were you aware of that, and will you comply if you are granted a licence?
5906 Say yes.
5907 MR. SELVADURAI: Commissioners, we have provided 15 percent to that fund.
5908 COMMISSIONER MENZIES: Thank you.
5909 The next question is sort of following on some of the earlier ones. You talk about the need for the real Toronto, or the new Toronto, and that sort of stuff, and it is interesting, but there are existing talk formats. Toronto is, maybe, one census away from being a city in which, similar to Vancouver, there is no visible majority any more. It has that sort of diversity.
5910 Why wouldn't we be able to assume that, as the nature of that market changes, the nature of the programming and the nature of the audience, there will be a market need for the existing talk providers to adapt?
5911 Right now, most of their listeners are guys who look like me, right? But we have a limited shelf life, and there is a new market coming forward. Wouldn't we be able to expect that the existing operators would have to adapt to that market or die?
5912 MR. SELVADURAI: That's a great question, Commissioner. For 50 years they haven't adapted to it, and this phenomenon of over 50 percent of the people born outside, and the diverse community, didn't happen in the last one year or two years. It's long-term, and they haven't done it, and we cannot sit and wait for them to do it.
5913 And this is the right opportunity, we will do it.
5914 COMMISSIONER MENZIES: Good. That was a good answer.
5915 COMMISSIONER MENZIES: In paragraph 44 of your written submission -- and you don't need to refer to it -- you refer to engaging listeners who are new to Canada.
5916 Given the language barriers, how would you do that, and how is that different from the several third language ethnic operators in the market who might see that as their role?
5917 MR. SELVADURAI: Commissioners, I can say --
5918 COMMISSIONER MENZIES: In cases where there are language barriers. There isn't always a language barrier.
5919 MR. SELVADURAI: Commissioners, I can say -- I mean, there is a language barrier for new immigrants. I can assure you that I understand that market. I ran several ethnic stations here in Canada, and in the U.S., but the majority of the audience we are targeting, they are very fluent in English, and they work and they live, in a mainstream way, in the English language.
5920 They will be our listeners, and there won't be any language barriers.
5921 COMMISSIONER MENZIES: Tell me about your operations in the States and how you think that experience translates -- because you operate several, a handful at least, ethnic broadcasters in the States. How does that experience translate, in terms of preparation, to be able to compete successfully in this market?
5922 MR. SELVADURAI: Thank you for the question, Commissioner. It's a great question.
5923 I started that company -- I am an engineer. I came to this country, and I had a great opportunity to have a good education. But I see the power of media, and I know what it can do for the community from what I built in Toronto.
5924 I saw the opportunity in the U.S., and I launched my first stations -- first few stations -- in 2008, when everybody said I was crazy, going with a business plan to the U.S., no experience in the U.S., and going with the new technology of (inaudible) radio, coupled with other local FM and everything.
5925 They told me I was crazy, and the banks wouldn't give us the money.
5926 But I launched, in the midst of the recession in 2008, not one, but five stations together, in major markets -- New York, Chicago, L.A. and D.C.
5927 And here, today, we are having seven major markets -- they are all top 10 markets, targeting multicultural radio.
5928 I'm an entrepreneur. I know how a company is built around innovation and finding the right target market.
5929 We launched ethnic services for South Asian -- we felt the need there and the gap there.
5930 Then, the last -- in 2010 there was a competitive process that came from -- an FCC-mandated process when Sirius and XM merged. They said that you had to give some channels to some underserved audiences.
5931 There were 50 applicants. We were one of them. We are a Canadian company. Only one Canadian company.
5932 They awarded two people to do Hispanic channels. I don't know anything about Hispanic, but I understand the community need. We came up with a proposal. We competed with big people like InterVision. They have more than 30 stations in media markets. Our proposal was accepted because of the format. We chose the proper format, calling it the Inspiration Channel. That is not religious, but motivating, empowering people, entertaining and engaging people.
5933 We just launched three months ago, but we are five months away from -- at least, we proposed about 18 months to break even. Thanks to Carey, we are going to break even by August.
5934 COMMISSIONER MENZIES: Thank you.
5935 In your proposal -- and it was mentioned earlier by your panel -- you mentioned the trends in the States toward FM talk and that sort of stuff.
5936 If it's such a good idea, why hasn't anybody else in this market done it?
5937 MR. SELVADURAI: That was a surprise to us.
5938 COMMISSIONER MENZIES: That will do.
5939 MR. SMITH: May I add something? To flip from a music station to a talk station, you need to have CRTC approval, so...
5940 COMMISSIONER MENZIES: We get 800 decisions, or something, a year, so I am just...
5941 MR. SMITH: No, I understand, but I am just explaining that it's different in the States than here, that's all.
5942 COMMISSIONER MENZIES: Ah, I get your point.
5943 Your news and commentary plans are, as we have mentioned, ambitious, and they appear virtuous, but they are also really expensive.
5944 I mean, original enterprise news reporting requires a lot more resources than, you know, rip-and-read, or "Guess what I just heard on Twitter?"
5945 How do you compete with the additional expense of that? Are you confident that that's not too great a burden to bear in what can be a pretty challenging market? It's very attractive, but it can be a pretty challenging market.
5946 MR. SELVADURAI: We are very confident that we will do what it takes, and we see this as the future of radio -- news and current information on FM stations. So we are absolutely dedicated to put all of our efforts in there, and we have enough financial resources, and we have a carefully crafted business plan.
5947 On top of that, we have a great partnership to bring, the immediate success to bring the promotional and marketing and all of those things.
5948 And we have a great team here. What you see here are the people who are going to be running the station, Commissioners.
5949 Carey was one of the two people consulted to launch 680, which is a very successful station, and he ran the largest billing station in the entirety of North America.
5950 And, Judy, she has launched a few stations in Toronto.
5951 And we came up with an innovative idea, and a different idea, when we selected the people.
5952 We know that digital is going to play a crucial role in our content, and we hired Alyssa.
5953 We've got the team. So we have the experience here, in Toronto. We understand Toronto. We understand local. And we have the financial capacity, and we have the expertise.
5954 And if you want me to go through our allocations of the resources for the various operations, I am happy to pass it on to Chris.
5955 COMMISSIONER MENZIES: No, that's good for now, but specifically on some of your financial projections, I wanted to know how you came to your conclusions on your market share projections.
5956 MR. SELVADURAI: That's a question for Gerry.
5957 MR. WALL: Thank you, Commissioner.
5958 The market share projections started from our market research. We tested, as you are probably aware, a concept stage to determine which talk format would be best received, in particular by our target audience, the 18 to 54 age group.
5959 When it was determined that, in fact, the only concept that tested significantly different than the others, and positively, was the TOUCH format, we moved on to do a more intensive demand study, and through the course of that study we asked those who would be interested in listening to our content what they would do with their listening time, and approximately a third -- more than a third -- said that they would bring new listening to the market.
5960 In other words, they wouldn't take away or detract from their existing listening to other stations in the market, they would add, roughly, a third or more of listening to the market.
5961 We also asked and got information on the amount of listening hours that would be taken away from stations, and, in fact, which stations they would be.
5962 So we took that data and we calculated, on average -- we had to make some assumptions. These are projections, but we calculated that you would get 2.3 hours a week of listening to TOUCH FM. That would be divided between new listening hours and some substituted away from others.
5963 So taking that estimate of hours of listening, we converted that over the reach, over the population, determined what that number would be, and divided it by the market size -- total listening hours -- to come up with the market share -- or tuning share, excuse me -- and that was 2.8.
5964 COMMISSIONER MENZIES: Thank you.
5965 THE CHAIRPERSON: Could I interrupt? I have a request for an urgent health break. Could we take two minutes, please?
5966 COMMISSIONER MENZIES: Sure.
5967 THE CHAIRPERSON: Thank you.
5968 THE CHAIRPERSON: I'm sorry, Commissioner Menzies. Please proceed.
5969 COMMISSIONER MENZIES: Great, thanks.
5970 I just need to go back to another technical question, to clean up, before I continue with the financials.
5971 There is a small math issue regarding your CCD initiative. In the scholarship program, "Develop visible minorities management skills in broadcasting" -- it's on page 60, and it states that you will devote $437,000 over seven years, or $62,500 per year, but seven times $62,500 adds up to $437,500.
5972 Are you following me?
5973 MR. SELVADURAI: That's right.
5974 COMMISSIONER MENZIES: It's a math issue, right? And it's a small issue but because these become part of conditions of licence we have to make sure they are right.
5975 So, really, all that has to happen here is you have to agree that the annual contribution in each of the seven years will be $62,429 for a total of $437,000.
5976 You could agree to make it $437,500 if you wanted. I'm trying to save you 500 bucks. So if you say yes to the first question, we are good.
5977 MR. SELVADURAI: I would rather do $437,500 so it gives us $1.75 million.
5978 COMMISSIONER MENZIES: Okay, so it's $62,500 per year for a total of $437,500 over seven years.
5979 MR. SELVADURAI: That's right, Commissioner.
5980 COMMISSIONER MENZIES: Okay. That will slightly adjust your total CCD contribution up by $500 too which goes on to your investors, which is my next question.
5981 You have filed financials with us that are good but you have also got very high expenses in the first couple of years, very high in terms of that because it's an ambitious project.
5982 What happens? The best way to ask this: Do you have agreements in place already with your investors for future injections of cash if needed?
5983 MR. SELVADURAI: Thank you for that, Commissioner.
5984 I am an entrepreneur. I told you I know how to raise funds. I have raised it during the recession to launch five stations. My investors -- I have access to additional high network people. On top of it while we are preparing this one, we approached a private equity firm.
5985 But I was able to quote from my existing investors. They are the investors I have provided $14.5 million as an equity firm. That's why I have been able so far to build this company as an equity.
5986 I did get -- I did submit that additional $5.5 million, a loan from a private equity firm. If you want to have that on file, I can file that as well.
5987 But as --
5988 COMMISSIONER MENZIES: Sorry, I just missed that last sentence. The private equity firm, just what you said about that.
5989 MR. SELVADURAI: Yes. I mean, I'll just repeat my answer again so that it's clear.
5990 So our business plan needs somewhere around $12 million and then I was able to raise $14.5 million as an equity fund.
5991 In the meantime I was working on the fundraising I also had a commitment from a private equity firm for an additional $5.5 million as a loan but I didn't submit that because I thought I raised enough.
5992 But if you want -- I mean to answer your question, funding is not an issue. Yes, I can get additional commitment if you want it or I can provide the loan financing from an equity firm which I have it.
5993 COMMISSIONER MENZIES: It's not necessary. But thank you for the answer.
5994 MR. SELVADURAI: Thank you.
5995 COMMISSIONER MENZIES: Your revenue per market share projections, I just wanted to touch on that, they are not seriously out of line with --basically from what we know of industry data with what they might normally be, but they are a little high in terms of revenue for market share. And given that you would be a standalone I was just wondering how you came to your conclusions on your numbers regarding revenue per market share.
5996 MR. SELVADURAI: Before I pass it on to Chris for market share, I think in terms of market share Gerry has one comment and then he will pass it on to Chris.
5997 DR. WALL: Yes, thank you, Prabha.
5998 It's just that when we had our last conversation you left me at 2.8 which is the derivation from the market research.
5999 COMMISSIONER MENZIES: Right.
6000 DR. WALL: In fact, what we used for our first year is 1.4 market share.
6001 COMMISSIONER MENZIES: Right, and then you go up to 3.5.
6002 DR. WALL: That's correct over the time period.
6003 Thank you.
6004 MR. LACOMTE: To answer your question with regards to what and how we came up with our revenue numbers, we went at it on a number of bases.
6005 First of all, we had a look at what the market itself, the Toronto radio market had been doing over the past seven or eight years, and then looked at what we anticipated it would do, going forward.
6006 For the purposes of the projections, we have assumed that the Toronto radio market would continue to grow by about 2 to 3 percent.
6007 With regards to specifically what revenue we would be able to garner from our ratings of 1.4 percent in the first year, we did a couple of analyses.
6008 COMMISSIONER MENZIES: I just want to be specific to make sure I get an answer to my question. The revenue per market share --
6009 MR. LACOMTE: Yes.
6010 COMMISSIONER MENZIES: -- it was specific in terms of that. And the background to it was you would be earning more per market share than others and I want to know why you think you can do that.
6011 MR. LACOMTE: Well, again, if I could just continue, and I will get to the answer to your question --
6012 COMMISSIONER MENZIES: Okay.
6013 MR. LACOMTE: -- we did a couple of other things. We did a fill rate analysis, again looking at what we thought we could sell our spots for and the amount of inventory we could have and what kind of fill rate we would need.
6014 Specifically, when we look at the first year of operations we have estimated that our revenues were going to finish around $3.5 million. We were going to have a share of 1.4 percent of the market which represents -- 3.5 million represents what we estimate is 1.4 percent of the revenue of the market, similarly to our share.
6015 So in the first year of operations we have anticipated that we would get our fair share of revenue for that fiscal year.
6016 As we continued to grow the business and went from a 1.4 share to a 3.5 share, there is a concept in the marketplace with regards to, depending on the format that you are offering you can overshare in your share of ratings on the revenue side called the power ratio.
6017 Traditionally, certainly, if we look at the Toronto radio market there are clearly the three AMs who, based on information that we have available, are all oversharing in their share of market share with regards to audience. They are oversharing on the revenue side.
6018 And we have anticipated that to happen not in our first year, not in our second year, but we begin in our third year to start getting a power ratio above one where we get a greater share of revenue dollars versus audience.
6019 COMMISSIONER MENZIES: Okay. Thank you.
6020 Did you discount at all, in doing your projections? Did you basically say this is the number we think we are going to get but, for the sake of this, we will take it down by 10 percent or 15 percent or anything?
6021 MR. LACOMTE: I think we have done it in two places.
6022 We have done it, one, in estimating the actual share of audience that we would get, based on the survey and the research that was done. It would indicate that we would get more than a 1.4 share. So we have already taken a discount there.
6023 With regards to our analysis on the revenue --
6024 COMMISSIONER MENZIES: So you have exercised prudence on both points?
6025 MR. LACOMTE: Yes.
6026 COMMISSIONER MENZIES: Okay, thank you.
6027 In terms of your -- one last question on that -- your revenue projections again, you projected that 50 percent of your revenue would come from the existing radio market. And given that these are all well-embedded experienced players, I want to know how you think you are going to get away with that because they will compete. They are experienced competitors.
6028 I want some assurances to what sort of plans you have made, knowing what could happen in terms of discounting and battling for advertisers. I want you to enhance my level of confidence that you are able to compete for the cash.
6029 MR. SELVADURAI: Thank you for the question.
6030 So the answer is two -- before I pass you on to Carey, there is two reasons.
6031 One is how are we going to get the dollar revenue? We are thinking we are going to get it.
6032 And also in terms of the sharing, because our target audience is a younger audience we are not just totally getting it from talk show formats. We are getting it from multiple stations.
6033 If you want to know who we are getting it from Carey can go through, but in terms of how are we going to compete with the existing people -- and we are not here to undercut the pricing. But we are here to make sure that our strategy works, our programming works through our partnership and we are going to do it.
6034 Carey, I mean, he has done -- this station is in a very competitive market. Without undercutting each other -- Carey, can you go through your experience, please?
6035 MR. DAVIS: Sure. The news talk format is very sales friendly. Retailers love it. It's great in big category, automotive, retail, financial, health.
6036 And a lot of the advertisers to current news talk radio stations want also to reach a younger audience, and that's what we will provide. It's the most effective format for advertising for many, many advertisers.
6037 COMMISSIONER MENZIES: Okay, thank you. No more questions for me.
6038 DR. WALL: Commissioner, if I could just add, on the research front it was reported that 4 percent of those people who currently don't listen to radio, don't listen at all, would listen to Touch.
6039 And then, as I mentioned before, 37 percent of those likely to listen to the station would in fact add new listening hours in.
6040 COMMISSIONER MENZIES: Sure. Okay, thanks.
6041 I just wanted -- the question was about how you are monetizing that. Anyway, thank you very much.
6042 Back to you, Mr. Chair.
6043 THE CHAIRPERSON: I think many of us have got some questions. I'll start.
6044 When I look at your first year of operation on your statements, it appears to be 2014. So are you saying that if we issued you a licence now it would take 18 months or more to go up into operation?
6045 MR. SELVADURAI: Well, no question if we get the license in September we will be launching in 2013, September. I think Chris mentioned the financial year ending as 2014. So we will launch in 2013, September.
6046 THE CHAIRPERSON: So how much time do you need from when a licence is issued for you to start up if you were successful?
6047 MR. SELVADURAI: Maximum one year from the issuing of the licence.
6048 THE CHAIRPERSON: 12 months, okay.
6049 When I look at your financials, as well, I think you said that you would dig a hole for yourself that reaches $11.5 million. Is that what your cumulative losses and capital investments are?
6050 MR. SELVADURAI: That's right, Commissioner.
6051 THE CHAIRPERSON: And you have provided support for up to $14 million at this point in time.
6052 MR. SELVADURAI: That's right, Commissioner -- Chairman.
6053 THE CHAIRPERSON: Okay.
6054 What is the payback period for your business strategy? When I look at your financials it doesn't payback over seven years so it must go long beyond that. At what point in time have you recovered your investments, your losses? How many years out?
6055 MR. SELVADURAI: I mean the answer to that question is this investment for our company it's more of a strategic investment than a payback investment as a primary. This is a very -- an opportunity, a privilege for us to start FM station here. That's a strategy important for us. That's where the industry is, there.
6056 But if we build it right and we know we will build it right, the news take more -- news talk station makes more money than any other station in the long term. That's what is happening everywhere else. In the U.S., the WTOB is the highest billing of $65 million -- that's in Toronto.
6057 So even though the payback for a short period of time it may not be there but we know it will payback big in the longer term.
6058 But more than that it's a strategic investment and investors are willing to pay. They are long term investors, Commissioner -- Chairman.
6059 THE CHAIRPERSON: That's not the answer that I'm looking for. I want to know how long it will take, based on your model, to breakeven and payback.
6060 MR. SELVADURAI: Sorry. I will Chris to go through the financial details, Commissioner -- Chairman.
6061 MR. LACOMTE: Thank you, Prabha.
6062 It will take eight years. Within the beginning of the eighth year or at the end of, sorry, of the eighth year we will have fully recouped our capital investment as well as the losses incurred over the first four years of operations.
6063 THE CHAIRPERSON: And what would your cumulative capital investment be over the eight years?
6064 MR. LACOMTE: Capital including operating losses?
6065 THE CHAIRPERSON: No, just capital.
6066 MR. LACOMTE: Just capital currently we have budgeted a capital budget of 1.3 plus pre-operating costs of just under $500,000, so just under $2 million will be capitally spent on that operation over the first term of the licence.
6067 THE CHAIRPERSON: Okay.
6068 Your operations in the U.S. that were built up during the recession how are they doing today? I understand that they are not in English talk but they are in Spanish, I guess.
6069 But if you can expand upon how profitable they are, how many are profitable, are any profitable and how long it's taken to turn them into viable businesses.
6070 MR. SELVADURAI: The ones we launched originally in 2008 and 2009 they are all profitable. And one we launched in March of this year, the channel we were awarded last year, is going to be profitable in another three or four months. So as a company we are profitable.
6071 THE CHAIRPERSON: Okay. Let me try and ask the question a different way.
6072 If you pick Los Angeles as an example or New York how much have you invested in those markets? How long has it taken to turn around?
6073 If you are telling me that you started something in 2008 and it's already profitable today, which is five years, I guess my question is why is it taking eight years to turn Toronto into a profitable enterprise?
6074 MR. SELVADURAI: This is a different model, Commissioner, as what we did in the U.S. We went after the niche format. It's highly demanded from there. And our operational cost is low because we build a network model and even though we have several stations the model of the program it's a network model. So the cost is lower there.
6075 But building a new station it will take a longer time. We know it's slow growth, news talk.
6076 Carey can explain to you. It's a long build and that format is totally different.
6077 THE CHAIRPERSON: Okay. I just want to understand the format you have got experience in today.
6078 So you started New York and Los Angeles in 2008. How many years of losses did you have there given you are already profitable and how much investment did you have? And what was the bottom before you started turning it around?
6079 How much money did you actually lose cumulatively based on losses, operating losses in capital before you turned it back up again?
6080 MR. SELVADURAI: We lost -- we invested about 3 million and it took us three to four years to profitable. But keeping in mind, if we had an FM station or AM station -- FM station in another market we would have been profitable earlier. But we went with a different approach; HD technology, which was not available when we launched -- I mean all the things.
6081 Then we added small FM stations. So it took us a little longer, like three to four years for that format. But usually if it is a regular ethnic channel it will be profitable much, much earlier than that.
6082 THE CHAIRPERSON: So when you say $3 to $4 million is that per city or is that cumulative for all the cities?
6083 MR. SELVADURAI: The total of all the network.
6084 THE CHAIRPERSON: So you only sustained operating capital losses in all those six markets -- is it six markets? Is that what you're in right now?
6085 MR. SELVADURAI: Seven markets, Commissioner.
6086 THE CHAIRPERSON: Seven markets. Cumulatively loses and capital of $7 million -- of $3 million -- $3 to $4 million before you turned it around.
6087 And here you are looking at an $11 or $12 million bottoming out, if I can call it that, and an eight-year payback.
6088 MR. SELVADURAI: As I say, it's totally different. I mean our biggest loss in our South Asian radio network we created and the program format is not very costly as the Toronto market. I mean that was an entertainment plus a little bit of talk. So the cost is very low.
6089 And then we repurposed the programming in all the cities. But the undertaking we are doing it in Toronto it needs bigger capital and then we are going to have to compete with other people. So we understand the loss.
6090 THE CHAIRPERSON: So explain to me HD radio a little bit better because obviously the investment in HD radio is far less than the investment in an FM frequency.
6091 MR. SELVADURAI: I mean when I say HD radio that's one part of the distribution channel. What we did is we went with -- sorry, HD radio. This is a digital radio format in the U.S. -- how we adapted that to HD radio -- the FCC announced it's seven or eight years. Now, it's available in all the cars and almost 100 manufacturers are coming up with HD radio. It is getting traction there.
6092 We went after this niche format of providing no service -- South Asian market with HD plus low-power FM and digital apps and everything.
6093 So we have created our content and delivered it on multiple platforms in a cost-effective way. That's what our company is building, innovative content, innovative partnership and innovative distribution. That's how we build our company.
6094 With respect to Hispanic channels it's a talk format, 24/7 talk format. We have been extremely good.
6095 And with respect to Toronto I think we have the experience and the capacity to execute this.
6096 THE CHAIRPERSON: Okay. Why have you not considered digital audio broadcast in Canada?
6097 MR. SELVADURAI: I mean first of all it's not available in the HD format. HD radio is not accepted here and we are not going after a niche market here like a multicultural or any other market.
6098 This is a mainstream market we are going after and then we need the bandwidth of the FM power and FM station. We understand the FM. FM will make the news talk format very successful as all the other U.S. media broadcasters are converting them.
6099 THE CHAIRPERSON: But your expertise in the U.S. is in South Asian and ethnic radio using an innovative technology and you want to come to Canada and come to Toronto and provide mainstream English-language FM classical service.
6100 MR. SELVADURAI: I mean as a company, my experience, personal experience is I'm a builder and I'm an entrepreneur. I'm a media entrepreneur. What format goes -- we go after is based on the need of the market. We understand the multicultural was underserved in the major markets. We went there so we picked that.
6101 And when Sirius XM gave us a chance we figured out the Hispanic community and the nationwide they don't have the spoken format. We proposed it for 51 million people. We went there.
6102 And now we think in Toronto we need a spoken word English-language format.
6103 And to experience, I'm not going to be on there. I'm an entrepreneur. I'm a builder and I have people here they have built talk format. He built 680 here. He ran the number one station in terms of billing in the U.S. He has experience. He is my chief operating officer for my company and he is going to carry on.
6104 When are you moving here?
6105 MR. DAVIS: When am I moving? In a New York minute.
6106 MR. SELVADURAI: In a New York minute he will be here. Judy is our station manager and she is a content partner we build the team around.
6107 On top of it we have Chairman Kevin who has been a mentor and helping me for the last four years.
6108 We have the access to the expertise, the capital and the infrastructure we need to get it going. This is very privileged for us.
6109 And we have grown from a Canadian company, only one company selected to program 24/7 news talk format in Hispanic for 51 million people. That shows something that we are passionate and we can deliver.
6110 THE CHAIRPERSON: I find it interesting that you started your entrepreneurial business in broadcasting in an ethnic or non-English format and what we have heard this week from other parties obviously is the need to recognize the ethnicity of this country being as multicultural as Toronto is, probably -- maybe not as much as Vancouver but, clearly, one of the leading countries in the world with multicultural residents in here as well. And you come in and you want to provide English talk.
6111 MR. SELVADURAI: That's a great question. I'm thankful -- thank you for the question.
6112 I think it's time that we target this Toronto multicultural audience in a franchised and mainstream way and talking their issues and their success and their celebrations in a mainstream way than serving them in a side lots. Then we have enough channels doing that in the side lots. We want to integrate them as a mainstream and franchise them as mainstream.
6113 That's what we are all about and Toronto needs it. New audiences they need it and they need a mainstream service targeting their -- what they believe is important for their Toronto.
6114 THE CHAIRPERSON: Okay. Those are my -- go ahead.
6115 MR. SELVADURAI: Sorry, Chairman.
6116 And we are not an ethnic -- our target audience is not just ethnic. Our target audience is 18 to 54 mainstream Toronto people but happen to be visible minorities and female audiences -- comprise large portion of that. So our format is 18 to 54.
6117 THE CHAIRPERSON: Okay, great. Thank you. Those are my questions.
6118 Commissioner Pentefountas...?
6119 COMMISSIONER PENTEFOUNTAS: Yeah.
6120 In terms of content I get the -- there seems to be an awful lot of the content that will come from third parties. You mentioned some of them, papers, magazines. Is there an agreement in place with respect to that content provision and, if so, is it public?
6121 MR. SELVADURAI: Commissioners, to answer your question, we don't have an agreement yet but we have an LOI, letter of intent. But they are our strategic content, marketing and promotional partners, not just the content partners.
6122 But what we provided to you as a business plan is a standalone business plan with our investments, a standalone structure to do all of the content. We haven't included their content contribution or marketing or promotional contribution into the business plan.
6123 So it's a standalone business plan, Commissioner.
6124 COMMISSIONER PENTEFOUNTAS: Is your letter of intent part of the record?
6125 MR. SELVADURAI: No, it's not part of the record but we can provide it.
6126 COMMISSIONER PENTEFOUNTAS: Okay.
6127 And was that part of your initial submission, this relationship with third parties for content and promotion and marketing?
6128 MR. SELVADURAI: We made sure, before we put their name in the supplementary brief as to how their content can embrace our audiences and then help us in terms of sales marketing and content. We want to make sure we enter into an LOI for that purpose.
6129 As soon as we get the licence we will provide the full agreement for that, Commissioner.
6130 MS SCHWARTZ: One thing I just would like to clarify.
6131 COMMISSIONER PENTEFOUNTAS: One at a time.
6132 MS SCHWARTZ: Sorry.
6133 COMMISSIONER PENTEFOUNTAS: Maybe close your mike, Mister -- yeah, that's right.
6134 MS SCHWARTZ: When you say third party content, I just want to make it very clear that everything that you will hear on Touch FM will be 100 percent original to Touch FM. It will be produced by Touch FM producers. It will be in-house Touch FM content produced in conjunction with our partners.
6135 So we will be tapping into their expertise. We will be tapping into Toronto Sun's sports reporters who have been reporting on baseball since.
6136 COMMISSIONER PENTEFOUNTAS: Yeah, but I'm trying to understand the nature of that relationship.
6137 MS SCHWARTZ: So for example, if you look at our programming clock in the morning, which is Appendix 5, you'll see different blocks that are called "conversation hubs".
6138 You know, if we were talking about the NDP -- the poll about NDP surge, we might tap our partners at Ipolitics to come in and talk about what that really means from a Toronto point of view.
6139 For our young mommy club, they will be leading the conversations with moms. They have an engaged following of 80,000 moms and dads online.
6140 COMMISSIONER PENTEFOUNTAS: Will they be paying for that air time?
6141 MR. SELVADURAI: No, Commissioners. We are envisioning a synergetic partnership, and to answer your -- the question of how -- what sort of partnership. We are looking at them as a strategic sales, marketing and content partners and we don't --
6142 COMMISSIONER PENTEFOUNTAS: So they're not for profit partners.
6143 MR. SELVADURAI: I mean, if there's a synergetic partnership, there will be eventually a profit for both side, but that's -- is that the question you asked?
6144 COMMISSIONER PENTEFOUNTAS: Yes.
6145 MR. SELVADURAI: Yes.
6146 COMMISSIONER PENTEFOUNTAS: Yeah.
6147 MR. SELVADURAI: It will be profitable for both sides to get this.
6148 In the world of the media, integrations -- I mean, it's good for them to partner with the radio if they don't have a radio to get their content out and promotion. The same thing, we feel they have a great content, access to great content, access to great marketing. We want to get benefit out of it.
6149 COMMISSIONER PENTEFOUNTAS: But you haven't fleshed out the nature of that relationship and the nuts and bolts of that relationship as yet.
6150 MR. SELVADURAI: Not --
6151 COMMISSIONER PENTEFOUNTAS: Okay.
6152 MR. SELVADURAI: Not yet.
6153 COMMISSIONER PENTEFOUNTAS: How will this partnership help you franchise the multi-cultural communities?
6154 How does the Toronto Sun or any of the other sources you mentioned help you with that?
6155 MR. SELVADURAI: And to answer your question, I mean, our target audience is 18 to 54 mainstream Toronto, and as I said, Toronto Live target audience 75 percent lies in 25 to 54. That's our prime target. And they have the content.
6156 And I mean, and to answer -- I mean, The Sun, we are specifically going after some sports content. So this is just a building of the partnership.
6157 And in terms of targeting to the multi-cultural organization, there are hundreds of content providers there and then we know how to build that partnership. We have done it before, and then we can do it.
6158 But we just want to show our ability to empower other people to become as a partner, Commissioner.
6159 COMMISSIONER PENTEFOUNTAS: Okay. How many people will be employed by --
6160 MR. SELVADURAI: I think, Chris, could you answer --
6161 COMMISSIONER PENTEFOUNTAS: -- by Touch, sorry.
6162 MR. LACOMTE: In the plan before you, we have anticipated hiring 57 full-time equivalents for the operations of the radio station.
6163 COMMISSIONER PENTEFOUNTAS: How many; sorry?
6164 MR. LACOMTE: Fifty-seven.
6165 COMMISSIONER PENTEFOUNTAS: Fifty-seven?
6166 MR. LACOMTE: Yes.
6167 COMMISSIONER PENTEFOUNTAS: Full-time employees.
6168 MR. LACOMTE: Sorry. I should say 47 full-time employees, 10 part-time employees, 54 -- 57 positions.
6169 COMMISSIONER PENTEFOUNTAS: All remunerated positions.
6170 MR. LACOMTE: Yes.
6171 COMMISSIONER PENTEFOUNTAS: Okay. On the sort of HUB theory, and it's interesting, but why not just go to Facebook for that?
6172 MR. SELVADURAI: There is no voice there, Commissioner. We want to make -- give them the voice. But we'll be -- I mean, we'll be partnering with Facebook and we will have Facebook and everything, but here we are building something with voice.
6173 The conversation happening in the Facebook with electronic text space, we want to give them a voice.
6174 COMMISSIONER PENTEFOUNTAS: Explain to me your partnership with Facebook?
6175 MR. SELVADURAI: Sorry. I didn't say we have a partnership with Facebook. I said we will have Facebook. Sorry.
6176 COMMISSIONER PENTEFOUNTAS: Oh, sorry. That's what I heard.
6177 I'm just trying to wonder who you're not partnering up with.
6178 MS SCHWARTZ: And just further to that point --
6179 COMMISSIONER PENTEFOUNTAS: Grab everything.
6180 MS SCHWARTZ: -- it's about bringing a voice, but it's also bringing all of these individual conversations that are happening online together, to finding the commonalities in our different experiences and between communities and to finding the best representatives of those conversations and talking about them on the air.
6181 COMMISSIONER PENTEFOUNTAS: Okay. At one point were you talking about sort of including people -- maybe people with accents on the radio? Did I hear that?
6182 MR. SELVADURAI: Yes, Commissioner. I'll ask -- I'll wait for your question.
6183 COMMISSIONER PENTEFOUNTAS: Oh, no. So speak to me on that, I guess.
6184 MR. SELVADURAI: I mean, what I wanted to see is we will truly reflect the right Toronto.
6185 I'll ask Brian to go through as to why that is important in the radio and how we intend to do it.
6186 MR. THOMAS: Commissioners, we'll have a mix of people, certainly, in the cornerstone areas, in morning and afternoon drive. There will be people who have lots of experience and who are perhaps known in this market already, but they will be new voices brought into TOUCH FM who perhaps don't have any broadcasting experience and we will, probably for the first time in mainstream radio, actually have some people with accents.
6187 This is a reflection of the communities that we are serving, a reflection of those people who are under served. So there will be a mixture of people which we will train, actually, to become broadcasters who already have some ability or talent to communicate.
6188 That'll be one of my main functions for TOUCH FM, is to make sure that we've got the right kind of people and the kind of people that -- of the audience that we're reflecting.
6189 COMMISSIONER PENTEFOUNTAS: Okay. Just briefly, one -- I know it's been raised before, and the revenue per share is troublesome. It seems unrealistic, especially in your year one.
6190 And some of this information is sensitive and confidential, but when you compare yourselves with other people in the market, some of whom have been around for 50 years, it does seem exorbitantly high, your revenue per share, given that you're only calling for a 1.4 share in year one.
6191 I'm not talking about further on down the road, but specifically as it relates to year one.
6192 I also understand that you may have a five share and you may be able to get eight or 10 percent of market revenues. I mean, the more your share, it grows exponentially. But at 1.4, the chances are you're not going to get 1.4 percent of the $270 million Toronto market.
6193 Do you want to just have one more crack at that revenue per share?
6194 MR. SELVADURAI: Chris?
6195 COMMISSIONER PENTEFOUNTAS: It's troublesome. I can't remember who the financial person was.
6196 MR. LACOMTE: Thank you.
6197 I think -- definitely I understand your question and the concern you have. I think there -- we've taken a number of different approaches to coming up with this revenue number.
6198 Again, we have used the market analysis and where we anticipate the market to go. The fill rate analysis, we've used very reasonable numbers. Spot rate numbers that are very consistent with the marketplace today, and sell-out rates that are totally achievable.
6199 Lastly, you know, we've also looked at the various individual stations and how they're performing across the market and how well they're over-sharing.
6200 I think there's one added point that I would add, which is, really, our relationships with these partners and our ability to really get out of the gates very strongly.
6201 COMMISSIONER PENTEFOUNTAS: I still don't have anything concrete on that relationship, so you keep coming back to it, but it's fine. I think you've had a crack at it.
6202 But there is no over-sharing at a 1.4 market share. You agree with me on that.
6203 MR. LACOMTE: No. And we have not projected to do that, either.
6204 COMMISSIONER PENTEFOUNTAS: Well, that revenue per share looks high.
6205 At any rate, last comment and I will close.
6206 MR. SHEA: I want to answer your question, perhaps, in a different way.
6207 COMMISSIONER PENTEFOUNTAS: Sure.
6208 MR. SHEA: I'm on the advisory board of McLaren Advertising, and it's interesting; last year their biggest area of growth is specific streamed ethnic advertising in Toronto.
6209 COMMISSIONER PENTEFOUNTAS: Third language.
6210 MR. SHEA: Third language.
6211 COMMISSIONER PENTEFOUNTAS: Yeah.
6212 MR. SHEA: Third -- I'm sorry. Both.
6213 So specifically, T-D Bank -- I'm using it hypothetically -- advertising in English to the Chinese market but using different cultural aspects and so on to reach that market.
6214 I'm sorry, Mr. Pentefountas.
6215 COMMISSIONER PENTEFOUNTAS: On a third language broadcaster.
6216 MR. SHEA: No, using --
6217 COMMISSIONER PENTEFOUNTAS: A broadcaster that's broadcasting in a third language, not English or French.
6218 MR. SHEA: Using all aspects of media, whether that be print or -- in other words, they've created a division at McLaren specifically to target various -- the diversity of the ethnic market in Toronto. And it is their biggest area of growth.
6219 Why? Because of the size and the diversity of the ethnic market.
6220 So we bring -- we bring that back to, you know, we are going to be a combination of mainstream with targeted at women and the ethnic opportunity because it is the largest area of growth.
6221 Finally, whether you're in the television business today, the magazine business today, what the client is asking for is an integrated sale.
6222 So the reason why Toronto Life and Toronto Sun are very interested in this proposition is they need to be able to present to their clients integrated marketing opportunities. They have no relationship with a radio group in Toronto.
6223 These are -- you know, specifically Toronto Life because I'm well versed on the management and the ownership of that company. For them to agree, both on screen and in writing, to form a content-sharing and marketing and promotion relationship, which almost every major media company in North America is doing today, I think gives a lot of credence to prop up.
6224 COMMISSIONER PENTEFOUNTAS: Well, we'll have to wait and see.
6225 I don't know if anyone else has questions, Mr. Chairman.
6226 THE CHAIRPERSON: Yeah, thank you.
6227 Commissioner Molnar?
6228 COMMISSIONER MOLNAR: Thank you.
6229 Good afternoon. There's been a very comprehensive discussion regarding your programming strategy and your business plan, and so as in your opening statement I want to change gears for a minute. And I just want to focus back on the comments you made related to the frequency where you said there's no doubt that a very compelling case supports the view that 88.1 should be awarded to a spoken word format.
6230 As you know, there are many applications in front of us for spoken word and for other uses of this frequency, and I wondered if there was something particular that you could expand upon here that would say to us yes, there is, in fact, something technically that ties it, or what is it you're meaning by that term?
6231 MR. DAVIS: That we don't have to broadcast in stereo, that a spoken word station can -- like CBC Radio One can broadcast in mono. And when you broadcast in mono, you increase the listenability of the signal in the contour area. You get a better signal in the contour area, so therefore, this would be the better use of the 88.1 signal because it would be providing, in a monaural signal, better listenability for the contour coverage.
6232 COMMISSIONER MOLNAR: So you're not accessing a greater number of people within the community or anything. You're just saying the quality of the signal relative to what's required.
6233 MR. DAVIS: FM begins to have -- well, here's the engineer.
6234 COMMISSIONER MOLNAR: I thought we did have some engineers here, and I thought if there was something technical that -- it's fair enough.
6235 Those who came forward with music platforms have looked at the signal and viewed it to be adequate, so I'm just wondering, is there something technical that would say it fits a certain format better than others.
6236 MR. SELVADURAI: At least one question I can answer on my engineering background. Thank you.
6237 So what, technically, that does is, Commissioner -- I mean, music needs stereo; talk doesn't need mono. I mean, most of the markets, CBC does mono because to reach a good quality signal.
6238 So what that means is, the same transmitted power -- we are not changing the transmitted power or contour. We're turning off the stereo.
6239 What that means is at the -- let's say we have provided a very comprehensive and one of the good enduring format with -- in terms of how many people in the .5 millivolt coverage. If there is any doubt because when I sat in the back from the other conversation, they were raising about the lack of reach and everything.
6240 I mean, even if the coverage -- if there is any doubt that people are not going to listen to that station in the .5 millivolt, we can scientifically prove and engineering provide another diagram showing that the receivers -- the radio receivers will listen better at the mono.
6241 Let's say if in that contour if there's an issue for the receivers because the stereo becomes a noise for the receiver, so you turn it off, the stereo. There is no noise. So the receiver will receive pretty good.
6242 So what we are saying is, we will guarantee our listeners in the contour will be able to listen, so this is a technical argument that this is the better frequency usage for the frequency if you think this frequency is small. So better way to use the FM frequency.
6243 COMMISSIONER MOLNAR: To ensure I understand, can you make that same argument with every frequency?
6244 MR. SELVADURAI: All --
6245 COMMISSIONER MOLNAR: Because you don't require stereo, you can guarantee its reception, so it's nothing particular to this frequency; it's just an argument for spoken word.
6246 MR. SELVADURAI: It's an argument for an FM frequency when they're transmitting mono. And when it's a spoken word, you don't use stereo. It's a mono-generated signal, so it's an argument for all of the frequencies which -- FM frequencies which can go on mono.
6247 COMMISSIONER MOLNAR: Thank you.
6248 THE CHAIRPERSON: Any other questions?
6249 Commissioner Patrone.
6250 COMMISSIONER PATRONE: Just on that point. And people listen to FM because they have stereo because they can access audio in stereo. And presumably you're going to have bumper music, you're going to have music in various parts -- or, you know, separating parts of your content.
6251 Are you not depriving your listeners of one of the best things about FM radio?
6252 MR. SELVADURAI: Before I pass it on to Carey, I mean, yes, the bumper music and everything, but currently most of the spoken word format on FM, they are doing it, including CBC, because turning off the stereo doesn't change your fidelity.
6253 It's -- but music -- spoken word is not generated at stereo signal. It's a mono signal coming out, so it's an unwanted need for the things unless you want to listen to some music on the advertisement. But it's happening everywhere.
6254 Carey himself had an experience in New York. Carey, you wanted to say something?
6255 MR. DAVIS: Sure. We did it in New York and -- on an FM station that had what's called a rim shot in over the five burroughs. We took off the stereo signal. We had an increase of half a share over the period of the next year on an FM station where we used mono.
6256 So it's used a lot as all of these stations that are flipping now are also turning off the stereo button to go mono. It just -- it's a way to reach more people through a ratings aspect. I don't say engineering, but from a ratings standpoint because of the listenability of the signal.
6257 COMMISSIONER PATRONE: But the power is -- your power is the same.
6258 MR. DAVIS: Absolutely the same. That's right.
6259 COMMISSIONER PATRONE: But you reach more people.
6260 MR. DAVIS: You -- because you have a more listenable signal. It's a better audio quality because it does not have the degradation of the stereo signal at the fringes.
6261 MR. SELVADURAI: Commissioner, if you want, I mean, we can provide --
6262 COMMISSIONER PATRONE: No, it's okay. Thank you.
6263 MR. SELVADURAI: We can provide a detailed engineering study.
6264 COMMISSIONER PATRONE: No, I'm not an engineer. I just wanted some clarity around that. Thank you.
6265 THE CHAIRPERSON: Thank you. I think that completes our questioning.
6266 Thank you very much.
6267 Madam Secretary, we're going to break.
6268 THE SECRETARY: Yes. We will come back at 2:15.
6269 MR. SELVADURAI: Thank you, Chairman and thank you, Vice-Chairman, and thank you, Commissioners, for the chance.
--- Upon recessing at 1252
--- Upon resuming at 1418
6270 THE CHAIRPERSON: Madam Secretary, are you going to start us?
6271 THE SECRETARY: Thank you, Mr. Chairman.
6272 We will now hear Item 14 on the agenda, which is an application by Tosan Lee on behalf of a corporation to be incorporated for a broadcasting licence to operate an English-language commercial specialty FM radio programming undertaking in Toronto.
6273 I would like that you please introduce your panel for the record, after which you have 20 minutes for your presentation.
6274 MR. TOSAN LEE: Thank you.
6275 Mr. Chair, Members of the Commission, Commission staff, fellow applicants, members of the public, good afternoon and thank you for the opportunity to present our application today.
6276 My name is Tosan Lee, currently CEO of All TV, a category 2 ethnic television station dedicated to the Korean community in Canada.
6277 On my right is Toro Lee, who is President of the same company. On my left is Bernard Charlton, who has provided invaluable assistance for our proposal.
6278 It's not written here, but as a supporting intervenor we have HooJung Jones from the Korea Veterans' Association of Canada in Hamilton.
6279 I'd like to, before we begin, just say that due to time restraints, my colleague, Bernard Charlton, needs to pick up his child and needs to leave at 3:30, so please excuse him if this goes beyond that time. Thank you.
6280 Today we will outline the key points of our application. First, there will be a general overview of the proposed channel format and our principal objectives.
6281 Second, we will describe the target market. Third, a video will be shown to provide a clear understanding of both the music format and the types of listeners.
6282 Finally -- fourth, we will discuss how our application could help improve Toronto. And finally, we will close by summarizing some key differences from other applicants.
6283 We are proud to submit our application to operate a new commercial FM radio station to serve the greater Toronto area. Our application is unique in that it appropriately reflects the changing nature of Toronto and thus will help to solidify and burnish Toronto's reputation for multi-cultural leadership.
6284 Asia FM will empower the English-speaking East Asian and Southeast Asian community in Toronto by correcting the under-exposure of Asian music and viewpoints in the current media landscape.
6285 The music format of Asia FM will primarily consist of popular artists and bands from Korea, Japan, China, Vietnam and the Philippines. Heavy emphasis will be placed on giving Asian-Canadian artists significant broadcast exposure.
6286 The major spoken word broadcasting components will be in English. There will be a non-English broadcasting component, specifically the Korean language, up to a maximum of 14 percent.
6287 Our application has multiple levels of benefits. Our principal objectives can be still -- distilled to the following.
6288 (1) Deliver a uniquely Asian-Canadian point of view on all issues. The benefit is serving an under-served market.
6289 (2) Provide broadcast exposure for Asian-Canadian musicians. This will not only increase Canadian content, but increase it for musicians who have no other chance.
6290 (3) Create new employment opportunities for Asian-Canadians in broadcast media and journalism. This will increase long-term diversity in the media industry.
6291 (4) Broadcast in-demand music that is currently unavailable on the public airwaves in Canada. By delivering an entirely new genre, we can revitalize the current radio spectrum.
6292 (5) Make Asian music accessible to a broad spectrum of listeners via an English-language broadcasting platform. Our hope is to increase cross-cultural understanding, which can only be done through the English language.
6293 (6) Encourage cross-cultural integration with both the Asian community and the broader Canadian community as a whole. Optimistically, this will result in Toronto becoming a better place.
6294 This new channel will serve two major groups. First, the Asian audience is comprised of English-speaking East Asian and Southeast Asian Canadians. Backgrounds of these groups include Chinese, Korean, Japanese, Vietnamese, Filipino and more.
6295 The second group is non-Asian Canadians who have an interest in the Asian music and culture. This group is growing rapidly amongst the younger demographic.
6296 Globally, Facebook "likes" and Youtube "views" for these Asian music stars have been increasing at a rapid pace. These are not originating from any one country or culture. In fact, in conducting our own research, 34 percent of the respondents to our survey were non-Asian.
6297 Now we'd like to present a video that will help everyone understand the music format more clearly. My colleague, Toro, will take over for this portion of the presentation.
6298 MR. TORO LEE: Asian music includes music from China, Japan, Vietnam and the Philippines, but the most popular and the most successful Asian music is currently coming out of Korea.
6299 K-pop, or Korean pop, features a compelling mix of upbeat songs, easy to sing choruses, dynamic dance routines and attractive young performers. It embraces the universality of pop, and essentially kids really love this stuff!
6300 To give you an idea of what K-pop is I have put together a medley of the most popular artists. Please notice the YouTube views. It's coming.
--- Off-record discussion
--- Video presentation
6301 MR. TORO LEE: In 2011, SM Entertainment, the largest record label in Korea, held for the first time two concerts in Paris, France. The following is an excerpt from a short documentary about these concerts. Please keep in mind that Paris has a Korean population of only 15,000 people.
--- Video presentation
6302 MR. TORO LEE: Actually, SM Entertainment only planned for one show which sold out in 15 minutes. They were persuaded by the fans to hold one more show. This is a flash mob or social media inspired gathering held outside the Louvre which convinced SM to hold a second concert. It sold out as well.
--- Video presentation
6303 MR. TORO LEE: K-pop has found similar mainstream success in North America, with sold-out concerts at the STAPLES Center in L.A., Madison Square Gardens in New York, and Overpeck Park in New Jersey which drew over 40,000 fans.
6304 And they are not your ordinary fans. To put it mildly, the fans are crazy about the music. Not only will they memorize the songs, which are in Korean, not English, but they will spend hours and hours learning the latest dance moves.
6305 The following is a clip of an audition for a K-pop cover dance competition being held in Toronto. Once again, that's cover dance, not cover song. Mixed Seouls is a group of friends from Toronto in their twenties whose love of K-pop is evident.
--- Video presentation
6306 MR. TORO LEE: As you can see, it's not just Koreans or Asians that are passionate about this music.
6307 Recently, Girls' Generation, the most famous of K-pop groups, appeared on "David Letterman" and "LIVE! with Kelly." I would like to finish off the video portion with a clip from these appearances.
--- Video presentation
6308 MR. TORO LEE: The other Asian pop, Chinese pop, Japanese pop, et cetera, are equally as dynamic and exciting but also have a definite style.
6309 I hope now you will have a better understanding of what Asian music is and why it is so popular with young Asians and non-Asians alike.
6310 MR. TOSAN LEE: Thank you.
6311 Asian FM's vision is about more than simply being a radio station that plays a specific genre of music via a narrow playlist to a tightly targeted demographic who may then purchase products from advertisers.
6312 While the popular Asian music we have discussed may seem like a niche music format, there are deeper connections and benefits that can arise by bringing it to a variety of cultural groups by a nonexclusive English-language platform.
6313 We have a unique opportunity to go beyond supplying music that is "in demand," which, quite frankly, can be easily replaced by an iPod.
6314 The opportunity is this. We have a new popular music from Asia that is infiltrating many other cultures. These fans are friendly and open. They care more about the music than the country they or their ancestors came from. The success of one country also permeates the others and the fans are open to all cultures. There is a positive feedback loop that is created as racial and cultural lines are blurred or ignored.
6315 When I visit some of these Asian music concerts, I see Canadians of Chinese, Korean, Caucasian, Persian, Indian and African descent, all ethnicities enjoying music together. There is a true mixing of cultures and a true breakdown of racial barriers.
6316 We operate an ethnic television station that is targeted towards Koreans, All TV. Without a doubt, ethnic media services are great and they truly serve their respective communities. Despite such tangible benefits, however, they do not bring together diverse communities.
6317 Operating All TV since 2001, I have witnessed firsthand the propensity for ethnic media to look inward and create an echo chamber effect. It is a struggle to present a properly Canadian inclusive multicultural outlook in such a format. This is where we believe Asia FM has a chance to succeed and we hope the Commission will see this as a desirable goal.
6318 There are many qualified applicants for this rare frequency. The Commission's task to select one, just one, is daunting. I would just like to highlight a few key points that differentiate our application.
6319 First, our proposed channel introduces an entirely new and in demand music genre to the Toronto radio landscape.
6320 Second, we hope that our proposed channel can help in some small way to unite diverse cultures through shared musical experiences. The youth are doing this and they have chosen Asian music as a medium to grow together. It would be nice to try to help nurture this.
6321 Finally, and most importantly, we are trying to provide a voice for English-speaking Asian Canadians on the public airwaves. Asian Canadians simply have limited role models in broadcasting.
6322 Asian Canadians are the largest group in Toronto. It is time for us to have a voice and a presence on mainstream radio.
6323 Naturally, Asian pop music is popular with Asians, and now, thanks to the Internet, it is gaining traction with non-Asian audiences all over the world. MTV in the States has created an all K-pop channel, MTVK. Billboard has created a separate K-pop chart and YouTube has now included K-pop as an official music genre alongside alternative R&B and jazz.
6324 Toronto is the ideal city to launch a groundbreaking Asian music radio station. It not only has a significant Asian population which is hungry for this music but it is also a culturally diverse city which is highly tolerant to world music.
6325 Once again, I would like to thank the Commission for this opportunity and we would be pleased to answer any questions you may have.
6326 THE SECRETARY: Thank you very much, Mr. Lee, for your presentation.
6327 We will now hear your intervener in support -- I'm sorry for mispronouncing your name -- Ms HooJung Jones from the Korea Veterans Association of Canada, Hamilton Region.
6328 Ms Jones, you have five minutes to present your intervention.
6329 MS JONES: Thank you very much for the kind introduction. My name is HooJung Jones from Korea Veterans Association, Unit 26 Hamilton.
6330 Dear Canadian Radio-television and Telecommunications Commission Committee, I would like to send my sincere appreciation to the Committee members and staff of the CRTC for their continuous efforts to serve the public.
6331 This letter is to support the Asia FM that serves the needs of the East Asian community by providing the first English-language Asian music radio station. It will unite younger generations who speak English throughout the East Asian community and enjoy listening to the world music, including C-pop, K-pop, J-pop, P-pop, V-pop and M-pop, Korea, Japan, China, Vietnam and Philippines.
6332 Currently, there is no radio station serving the East Asian community in English. It will mark the history of the radio in Canada as they are focused on high-quality music, informative news and educational programs to deliver journalistic voice of East Asian communities.
6333 Many Canadians also enjoy the world music. However, language barriers prevent them to freely appreciate the popular Asian world music and artistic expressions.
6334 Canada truly encompasses diversity of many cultures. The past contributions of the East Asian community are an integral part of Canada's unique cultural mosaic and economic development. Recently, I was overwhelmed with the passive responses from various East Asian and other communities regarding an exciting quest of future mission of Asia FM.
6335 Asia FM, Tosan Lee and his dedicated staff will be able to deliver unique and essential services to benefit the community, providing radio services in English, which will further enhance the quality of many citizens and bring the world close to Canada.
6336 Thank you for allowing me to voice my opinion and I ask your support on behalf of the East Asian community.
6337 Sincerely, HooJung Jones, Project Coordinator of the Korea Veterans Association Unit 26; Past President of the Hamilton Folk Art Heritage Council "It's Your Festival"; Director of Hamilton's Signal Association and Friends of HMCS HAIDA.
6338 Thank you very much.
6339 THE CHAIRPERSON: Thank you very much.
6340 I would ask Commissioner Molnar to begin the questioning.
6341 COMMISSIONER MOLNAR: Thank you.
6342 Good afternoon. Just a couple questions for Ms Jones first. Are you a resident of the Toronto GTA or do you live in Hamilton?
6343 MS JONES: I live in Hamilton, but I used to live in Toronto for almost 15 years and I travel to Toronto quite often and help organize one of the Korean Dano Spring Festival.
6344 COMMISSIONER MOLNAR: Okay. And you are supportive of their station and I wonder if it is the availability of the music that you are supportive of or are there other elements? What to you was the key factor that caused you to support this application?
6345 MS JONES: I have spoken with a number of veterans who fought during the Korean War and also the veterans who actually gave their blood to many peacekeeping efforts. They are absolutely happy for me to come out and they do support, because simply, older people, including me, came from South Korea and a lot of people from Hong Kong and Philippines. It's all due to brave Canadian heroes.
6346 And one thing that really intrigued me was English-speaking. My son is half Korean, half Welsh, so he speaks English fluently and limited Korean as well. And for him to grow up understanding different Asian background music, speaking in only Korean, it has a limited understanding. But when Toro explained to me about the English Asian FM, I really understood the concept.
6347 As I said, I am also representing the Hamilton Folk Art Heritage Council, which is one of the largest Canada Day festivals in Canada and I used to be the Past President of the festival, organizing over 2 million spectator festivals for 10 years.
6348 So I do understand the very importance of Canadian top entertainment, also the opportunity for the second generation to have the diversity to network together, but there is no station that I can approach to play this kind of music when he came and approached that in English.
6349 And we have the blessing of many veterans in many diverse communities which I have consulted before. Thank you for allowing me the opportunity to speak on behalf of them.
6350 COMMISSIONER MOLNAR: Okay, thank you.
6351 Maybe I will direct my other questions to the front row, to the applicants.
6352 Just following on the availability of East Asian music in Canada today, are there any of the ethnic stations here in Toronto that do provide some exposure to this music?
6353 MR. TOSAN LEE: Not that I'm aware of. I would presume that for example Fairchild may once in a while play a certain popular Chinese artist, that there may be overlap with our channel, but not in this -- not like this.
6354 In general, the ethnic stations are more geared towards the parents and the first-generation immigrants. This proposed channel is dedicated to the youth, the English-speaking youth.
6355 COMMISSIONER MOLNAR: Okay, I understand that and certainly the song on "David Letterman" appears quite mainstream. Are you hearing this on any of the mainstream commercial stations?
6356 MR. TORO LEE: I have heard reports that once in a while Korean K-pop gets played, but it's very infrequent. I think maybe CBC Montreal has played it once or twice, but generally, mainstream you will never hear it. I have never heard it personally.
6357 COMMISSIONER MOLNAR: Fair enough.
6358 Tell me, your application meets the basic requirements that we have as it regards the level of Canadian content on the airwaves and you have committed to the very basics. And I suppose I understand given the direction that you are seeking to go here in bringing South Asian music into Canada, but again, one of our requirements and certainly an objective is to provide space for Canadian artists.
6359 So what is your source for achieving the 35 percent Canadian content and your commitment to 10 percent emerging artists? How would you see meeting that requirement within the genre that you are proposing?
6360 MR. TOSAN LEE: I think most of the artists we would play really come from the response we get from the fans.
6361 In our application there is a list of Canadian artists and, to be honest, I don't know a lot of them. These are generated by the people -- the youth that want to hear these artists. So it really is more of an interactive kind of thing going on, where we will just play what the kids demand, not by some BBM chart or something like that.
6362 COMMISSIONER MOLNAR: But you feel confident you can maintain the levels of Canadian content required and still meet the needs of your audience?
6363 MR. TOSAN LEE: Yes.
6364 MR. TORO LEE: If I could add to that, I think the question, from what I understand, can Canadian-Asian talent -- is there enough Canadian-Asian talent to fit 35 percent, and, to be honest, we don't know.
6365 We have a list of basic -- a basic list of potential artists. Our plan is to have as many of those artists as possible but also have -- a component of our programming is not just Asian-Canadian but Canadian as well. So it will be a mix. So we can top up per se with non-Asian Canadian artists.
6366 COMMISSIONER MOLNAR: Let me understand. One of the areas of your application when I was reading through it appears that you have committed to providing 42 hours of local programming per broadcast week, but you didn't specify, or at least I did not see how you were proposing to source the other 84 hours a week of content.
6367 So can you tell us how it is you are proposing to source that other 84 hours?
6368 MR. TORO LEE: The 42 hours per week is a minimum, so a minimum of one-third. I believe that is a requirement.
6369 If you look at our program schedule, I believe in the supplementary brief or the actual application you have a tentative schedule of what we have planned.
6370 And if you look at, let's say in terms of local content, morning drive, the evening drive, Asian pop, urban Asia would probably be the first ones that would go local. So if you look at just those programs, that actually comes out to 72 percent.
6371 So we are aiming for more local content, but the 42 is a minimum requirement that we would achieve.
6372 COMMISSIONER MOLNAR: So whether it's 42 hours or 72 percent, it's not 126 hours or 100 percent. So what fills in your schedule?
6373 MR. TORO LEE: The remaining programs would -- we have programming agreements with Adidan(ph) from Korea. They have English-language programming that covers Asia. So it's basically foreign content we would fill the rest.
6374 COMMISSIONER MOLNAR: And then you would also have 14 percent Korean-language programming. That would be locally produced Korean-language programming?
6375 MR. TORO LEE: That's correct.
6376 COMMISSIONER MOLNAR: And when would that run?
6377 MR. TORO LEE: Our current plan is to have the Korean-language program during the morning drive.
6378 COMMISSIONER MOLNAR: So your morning drive would not be English language in an English-language station?
6379 MR. TORO LEE: That's correct. The evening drive would be in English.
6380 COMMISSIONER MOLNAR: Okay.
6381 I have a couple of questions about your business plan.
6382 You projected relatively modest revenues and modest tuning estimates, but as I understand they were based on market analysis that was conducted online and I think you referenced that within your opening statement, that a number of people who responded to your survey were not of East Asian descent, and very fair when you are going to sample a market and not any specific segment of that market. You would be serving the Toronto market in whole.
6383 However, it does not appear that your survey even limited its respondents to the Toronto market. Is that correct?
6384 MR. TORO LEE: That's correct. We can break down the numbers a little bit more detailed for the GTA.
6385 COMMISSIONER MOLNAR: Because you have it right there?
6386 MR. TORO LEE: Yes. To be honest, we should have put in the GTA numbers really. That was a misstep on our part.
6387 COMMISSIONER MOLNAR: Yes. I think at this time it's -- we are not in a position to allow you to enhance or change the application that you filed.
6388 MR. TORO LEE: I understand.
6389 COMMISSIONER MOLNAR: But you have the numbers, so I am going to ask you that based on that, was it based on the market numbers that you provided to us and responses are based on the responses of the GTA upon which you established your tuning and revenue estimates?
6390 MR. TOSAN LEE: I'm sorry, could you repeat?
6391 COMMISSIONER MOLNAR: I'm trying to understand. That survey -- that was an open online survey with no geographic boundaries -- was the basis, at least as I understand it, for establishing your tuning estimates for the station as well as establishing your revenue estimates for the station?
6392 MR. TOSAN LEE: No, they weren't used as a basis for the tuning estimates.
6393 COMMISSIONER MOLNAR: What was the basis for your tuning estimates?
6394 MR. TOSAN LEE: The tuning estimates would be based on an extrapolation of our business experience in the Korean market.
6395 COMMISSIONER MOLNAR: But you have proposed that this station would not be limited to the Korean population, certainly not the Korean population, not even the Asian population, but would be a way of opening --
6396 MR. TOSAN LEE: Opening doors.
6397 COMMISSIONER MOLNAR: -- the culture to all people in Toronto.
6398 MR. TOSAN LEE: Yes.
6399 COMMISSIONER MOLNAR: Okay. Okay, I'm just going to leave that alone.
6400 I will ask another question about your revenue estimates. You had estimated that 70 percent of your revenue would be coming from new revenue sources. Could you tell me the basis of that estimate?
6401 MR. TOSAN LEE: Our business plan -- you had mentioned that we have a Korean portion in the morning drive time and there was some scepticism about that, I understand, but essentially we are leveraging our experience and our expertise in the Korean market to help drive this market forward.
6402 So in the early stages, the Korean market that we know, the businesses that we know will help generate the revenues to push forward with more of the English-Asian-language programming -- sorry, English-language programming.
6403 COMMISSIONER MOLNAR: So that's the basis of your 70 percent? It is basically your advertising base for All TV -- I believe it's called -- that you're relying on to support this? Is that the basis of your estimate?
6404 MR. TOSAN LEE: Not just our current advertisers, but we do -- you know, when our salespeople go around, our product may not fit but they are looking for a place to advertise to reach a different market and we need to just make that available to them.
6405 These are unsophisticated, for all intensive purposes, small business owners who aren't looking at ratings numbers and can't afford to be on the edge 102.1 or anything like that.
6406 COMMISSIONER MOLNAR: Fair enough.
6407 You mentioned your advertisers are not sophisticated, and while you are in the broadcasting industry this is a new game and you would be playing against some very, very large, experienced, well-financed competitors in the English language, you know, competing for the same audience.
6408 Just tell me how you believe that you could overcome some of those challenges to actually be successful, to launch and become successful in what is really a new venture, against large and experienced competitors with a relatively -- well, it's a specialty channel, and specialty by its nature is niche in its popularity.
6409 MR. TOSAN LEE: I would say that is the answer to the question. This target market is not being reached by current -- not really being reached in this highly targeted fashion. So if an advertiser wants to target youth Asian Canadian market, where do they go? I don't know if there is an answer to that.
6410 So by providing a really highly targeted product we will be able to convince some advertisers to come over, but obviously from our revenue projections we don't actually have a lot of competing. We don't have, you know, a line for national advertisers because it's almost -- we are presuming we are going to fail against them, but we are not.
6411 COMMISSIONER MOLNAR: Can you remind me of the number you are targeting here, young -- the young Asian community, the English-speaking, young English-speaking Asian community within the GTA? Could you remind me of the number?
6412 MR. TOSAN LEE: Seven hundred thousand, eight hundred and fifty-two.
6413 COMMISSIONER MOLNAR: Okay.
6414 I'm going to move on to some more technical clarifications we need with your plan and that is related to your CCD commitments.
6415 If you have been listening over the period of this hearing we have been asking most applicants a question about basic CCD and the fact that for any revenue over $1.25 million there is a requirement that 15 percent of the basic CCD goes to the Community Radio Fund of Canada. Would you be prepared to accept that?
6416 MR. TOSAN LEE: Yes, we will accept that as a condition of licence.
6417 COMMISSIONER MOLNAR: Okay.
6418 On your over and above CCD, I just have a couple of questions related to specific initiatives that you have.
6419 One of them is $5,000 that you would direct to music production services. I just need to understand when you are talking music production services, I would understand that that is funding studio time or production services.
6420 Just to clarify, that would be studio time and production services outside of studio and production available at your station if you were to be successful?
6421 MR. TOSAN LEE: That's correct.
6422 COMMISSIONER MOLNAR: So that's all independent second-party outside of All TV as well?
6423 MR. TOSAN LEE: Yes.
6424 COMMISSIONER MOLNAR: Okay. Thank you.
6425 One more question about your CCD. You plan on contributing $2,000 annually to the Reel Asian Film Festival for best Canadian soundtrack. And it does say Canadian soundtrack, but I would just like to confirm that in fact it would be a prize that would be awarded to a Canadian for Canadian music?
6426 MR. CHARLTON: I believe we addressed that in the deficiency response. Yes, that is exactly what we would do.
6427 COMMISSIONER MOLNAR: Okay. Thank you very much.
6428 Another question. You are proposing to have an open-line talk show. Are you aware that there is a Commission policy regarding open-line programming?
6429 MR. TORO LEE: Yes.
6430 COMMISSIONER MOLNAR: Yes. And so you would put in place the measures to ensure that your station would meet all the guidelines set out in that policy?
6431 MR. TORO LEE: Yes.
6432 COMMISSIONER MOLNAR: Okay. Thank you very much. I have just one question left.
6433 You are, as I said earlier, new to the radio broadcasting game and did not in your application file any information related to your financial capability to support this station.
6434 There is obviously some risk when you go into a new venture with a new genre and what is potentially inexperience in the industry, and so I wonder if you could give us some assurance that you would have both the financial capacity as well as the willingness to pursue this and stick with this until it can be successful.
6435 MR. TOSAN LEE: Well, while we may be new to the FM band, actually not really. We started a -- we were pioneers of the SCMO frequency, in 1988 I believe, with a 24-hour Korean radio channel with our father. So at that point in time we knew nothing about SCMO and we dug in and worked hard and learned it and succeeded.
6436 In 2001, when digital television came around, we knew nothing about that as well and we put in our hard work, figured it all out, and here we are today, still operating and serving the community. We are very confident in our ability to figure it all out as we go along and learn it.
6437 MR. TORO LEE: On top of those two examples, we did run, I guess, a brokerage hour on AM 1430 for many years. That was during the drive time as well. When we started television --
6438 COMMISSIONER MOLNAR: I'm going to re-ask my question.
6439 Your financials suggest that you will be PBIT-positive in year two. And while you are very confident, you know, maybe if you were to sensitize those numbers you would rapidly be not PBIT-positive in year two. You will be having an over $300,000 loss in year one potential should your business plan not execute as effectively or as quickly as you had proposed, negative PBITs in year two as well.
6440 And what I would like is some assurance you have the financial capacity because nothing has been filed on the record to say that you have the financial capacity to carry through with these losses and further losses, if required.
6441 MR. TOSAN LEE: Just to address the financials, I know you have heard this many, many times, that everyone's numbers are conservative. Ours are and this is why.
6442 We have not included any national advertising in there even though we do already have relationships through our television channel with national companies such as Kia, Hyundai, Korean Air, LG, Samsung. These are all Korean national companies that support us.
6443 So those revenues are there to, you know, help with obvious possibilities of drops in advertising of, you know, even 20 or 30 percent. We know that that's possible, so we are ready for that.
6444 In addition, because All TV is functioning right now and in a firm position, All TV will be obviously able to help support if there are further complications in revenue receipts.
6445 At the same time, we do have personal equity in this and it will essentially be all of us. You know, one thing we can say is we are a family business since 1988. We don't have -- we aren't playing with stocks here. You know, if it goes down $100,000 we are not pulling our investment and running away.
6446 This is our life. We are putting our life on the line here and we are ready to commit 100 percent. We would not be here if that commitment wasn't there.
6447 COMMISSIONER MOLNAR: Okay. I want to make sure I heard. This is funded through personal investment backstopped by All TV?
6448 MR. TOSAN LEE: Personal equity, not All TV.
6449 COMMISSIONER MOLNAR: Okay. Those are my questions.
6450 THE CHAIRPERSON: Thank you.
6451 I just want to pursue this one step further. Do you have controlling interest in All TV?
6452 MR. TOSAN LEE: No.
6453 THE CHAIRPERSON: What percent of All TV do you control?
6454 MR. TOSAN LEE: Twenty-four percent.
6455 THE CHAIRPERSON: So how can you leverage All TV if you ever needed to?
6456 MR. TOSAN LEE: It is currently owned 24 percent, 24 percent and 52 by our father. So he is 100 percent behind us.
6457 THE CHAIRPERSON: Okay.
6458 MR. TOSAN LEE: So essentially a family business.
6459 THE CHAIRPERSON: Is he a partner to this business?
6460 MR. TOSAN LEE: No, he's not.
6461 THE CHAIRPERSON: He's not.
6462 MR. TOSAN LEE: Yes.
6463 THE CHAIRPERSON: Okay. Is All TV currently profitable?
6464 MR. TOSAN LEE: Yes.
6465 THE CHAIRPERSON: For how many years has it been profitable?
6466 MR. TOSAN LEE: It's difficult to say because in 2008 we were profitable, but with the global recession it was a bit of a hard time, but we are coming back up to profitability last year.
6467 THE CHAIRPERSON: So you weren't profitable in 2009 or 2010?
6468 MR. TOSAN LEE: Essentially a breakeven type of scenario.
6469 THE CHAIRPERSON: Okay. Those are my questions.
6470 Anybody on the panel? Okay.
6471 Thank you very much, that completes our questioning.
6472 MR. TOSAN LEE: Thank you very much.
6473 THE CHAIRPERSON: We will take a short 15-minute break.
6474 THE SECRETARY: Fifteen minutes, yes. Thank you.
6475 THE CHAIRPERSON: A short 15-minute break.
--- Upon recessing at 1507
--- Upon resuming at 1528
6476 THE CHAIRPERSON: Madam Secretary, let's begin.
6477 THE SECRETARY: Thank you, Mr. Chairman.
6478 We will now hear Item 15 on the agenda, which is an application by Trust Communications Ministries, a not-for-profit organization, for a broadcasting licence to operate an English-language specialty FM radio programming undertaking in Toronto.
6479 Mr. Andrew Hamilton will lead the panel. I would ask that you please introduce your panel for the record, after which you will have 20 minutes for your presentation.
6480 MR. HAMILTON: Thank you.
6481 Good afternoon, members of the CRTC, fellow applicants and Toronto residents. My name is Andrew Hamilton. I am the Chairman of the Board of Trust Communications Ministries.
6482 We are so happy to have this opportunity to present this application to you for a Christian format to serve listeners in Toronto.
6483 Please allow me to introduce my colleagues. Sitting next to me is Drew Brown, a local Christian recording artist. Beside Drew is Janice Baird, the bookkeeper for TCM. Next to Janice is Scott Jackson, the Executive Director of TCM and Station Manager of our station in Barrie, LIFE 100.3.
6484 On his left is Steve Jones, Program Director of LIFE. To his left is Maria Lopez, morning show co-host and news anchor with LIFE.
6485 Next to Maria is Fazal Karim. He is the Publisher and Editor of The Christian Herald.
6486 On the far right is our Broadcast Technician, Paul Firminger.
6487 In the back row is Reverend Ginette Howse, from Malvern Christian Assembly in Toronto.
6488 Before we present our application which explains how our new FM will serve Toronto, we would like to present a short video which explains why we see a need for a Christian format.
--- Video presentation
6489 MR. HAMILTON: By the way, the video was produced by AJ Martin, one of our announcers in Barrie.
6490 The video has shown you why Toronto needs a Christian format, and now my colleagues will help explain how we intend to make that possible.
6491 Let's have the ladies first.
6492 MS LOPEZ: Hi, I'm Maria Lopez. Our news department will report regular news, not religious news. It's news that is relevant to Toronto, and we will include local interviews.
6493 The difference between our news and news on other Toronto stations is that we will try to use non-sensationalized phrasing, so the style of our presentation is consistent with the uplifting music.
6494 MS BAIRD: Hi, I'm Janice Baird. Our advertisers will not be typical radio advertisers. The bulk of our clients will probably be churches and other parachurch ministries who don't use secular radio, primarily because they can't afford Toronto rates.
6495 Most churches have never tried radio advertising, so our client list will not take away revenue from mainstream radio, but these new clients will instead increase the number of ad dollars spent in Toronto.
6496 Last month, Missionfest Toronto was held at Global Kingdom Ministries in Scarborough. This is one of the largest Christian conferences in Ontario. It runs for three days, with thousands of people attending, and our Barrie station was the only Canadian station on-site.
6497 TCM is one of the sponsors at WonderJam at Canada's Wonderland this June. We are an advertising partner with Wonderland and have been for several years. WonderJam is the largest annual Christian concert event in the GTA, but there is no representation by any GTA station. Our new FM would attract Torontonians to more shows like this.
6498 MR. JONES: Hi, I'm Steve Jones. Several businesses wrote letters of support and hope to be advertisers. These letters are part of our application, which include Gord Evans Financial Solutions in Pefferlaw, D.L. Deeks Insurance in Markham, and Duca Financial Services in Toronto. We have endorsements from Christian education institutions, including Tyndale University College in Toronto.
6499 One of Toronto's main promoters of Christian concerts is Unite Productions, and company president Paul Kelly sent along a letter of support, as did Martin Smith, the President of the Gospel Music Association of Canada.
6500 You may have noticed the letter of support from Hockey Hall of Famer Mike Gartner, who enjoys Christian radio and endorses our application.
6501 And if I could draw your attention to the letter sent from Catherine Robertson of Eagle-Com Marketing, whose company provides various long-form programs to radio across Canada, Ms Robertson says that they have shows airing on CJYE in Oakville and WDCX in Buffalo, and "both of these stations do not effectively cover the GTA and it is impossible to reach the audience that we know want to hear our programming."
6502 MR. BROWN: Hi, I'm Drew Brown. I'm a GTA resident and a member of the 88.1 Advisory Committee.
6503 I have lived here for over 20 years, and I joined the committee because I like what TCM has done with Christian radio in Barrie. It's slick and very supportive of Canadian artists.
6504 Around the year 2008, there was a turning point in Canada in terms of Christian music. The quality of the production was the main thing, but as artists we realized that radio works with formats -- AC, CHR, hip hop and rock. So as artists we began recording with the mission of being radio-ready.
6505 Maybe it's still too soon to call ourselves the "Christian music industry", because we have a long way to go before we can be compared to the mainstream market.
6506 Mainstream radio thinks of Amy Grant when they think of Christian music, and she hasn't been a major artist for more than a decade.
6507 Myself and most artists work in music only part-time, because the "industry" is not able to financially support us full-time.
6508 In our radio application, we are committing to playing 12 percent CanCon each week, which is 2 percent over and above the Category 3 requirement.
6509 MR. FIRMINGER: Hi, my name is Paul Firminger, and at the present time there are no full-time Canadian FM Christian music stations serving Canada's largest city, Toronto.
6510 WDCX in Buffalo, U.S.A., is Toronto's only choice for FM Christian music, and many Torontonians think of WDCX as their only local FM option.
6511 88.1 is a limited directional signal which cannot produce a large signal footprint of 50,000 watts or more. However, with 800 watts we can serve the GTA with a strong, reliable signal.
6512 And because TCM is a charity, and is not controlled by shareholders who need dividends every quarter, we can operate with significantly lower operational expenses.
6513 We will still use professional broadcast equipment to provide the best quality signal, but making a profit is not what drives this mission.
6514 MR. JACKSON: Hi, I'm Scott Jackson. Christian radio is unique. People love this format so much that they write cheques and make donations to support it.
6515 Why do they do that? Well, it's because we represent something that is important to them. Some people like the aspect of it being family friendly, there are no provocative or drug-based lyrics, and there are no lyrics promoting violence in Christian music.
6516 There are many charities vying for donations. We have found that people give to things they believe in. If you love animals, you might give to the Humane Society. If you have a heart for children, you might support a child in a third world country. And also on that list is Christian radio. Donations account for nearly half of our budget.
6517 Even during the recession a few years ago, our annual Barrie Sharathon fundraiser not only reached the goals, but exceeded the goals.
6518 Our new FM is also listener-supported under the umbrella of Trust Communications Ministries. Donations are a revenue source that I believe doesn't impact any Toronto station.
6519 How many radio stations in Toronto can say that people give them money just because they like them?
6520 MR. KARIM: Hi, I'm Fazal Karim. I, too, am a GTA resident, a member of the 88.1 Advisory Committee, and the Publisher of a monthly Christian newspaper available in more than 500 churches across the GTA. It's a resource containing Christian information and advertising, and I see this radio station doing the same thing.
6521 It's not about being Protestant or Catholic. We are not bound by denominations.
6522 To serve Toronto listeners and guide our station before and during start-up, we developed an Advisory Board. This board serves to advise TCM about Toronto.
6523 We can provide contacts with Toronto churches with whom we already have a relationship.
6524 We will introduce them to Canadian artists, and direct them to potential advertisers and donors whom we consider to be a vital part of our ministry.
6525 MS LOPEZ: We will design several programs to reach the local audience. "Toronto Today" is a 30-minute news magazine show that will air on Saturdays. It's not a spiritual show, but rather a summary of the week's news stories and longer versions of interviews.
6526 How often have people said, "There's never any good news"? Well, now there is. The "Good News Patrol" is a soft news story about people who overcame adversity. It's a good transition to wrap up a newscast.
6527 MR. JONES: Having seen the video, you saw the testimonials from Torontonians who passionately want Christian radio to come to the GTA.
6528 Before producing the video, we hired two secular research companies to help us assess the listener demand for this format. Leger Marketing did an OMNI survey which told us what we already knew, that people with children are more likely to listen and value a Christian radio presence.
6529 We then hired Bray Partners Communications to assess the market in terms of potential market share and potential revenue. Bray's research encouraged us to pursue the application.
6530 More than the findings from these research companies, we have discovered the following: Christians who aren't familiar with Christian music don't know if they like it until they hear it. But once they hear it, they become fans, and Christian radio becomes a part of their day.
6531 MR. BROWN: Our music meetings will utilize the research of Canadian music charts, but to maintain the identity of Toronto, we will conduct focus groups and music tests with Toronto listeners. The focus groups invite listeners together to fill out report cards about our features, our DJs and our music.
6532 We will ask listeners specific questions about our news coverage, the style of music, and the relevancy of our DJs.
6533 These focus groups will be ongoing, to help shape our station.
6534 MS BAIRD: We are big believers in giving back to the community. Not only will our team be available to speak to the next generation of broadcasters in college radio programs, but we have two $500 awards to present to Humber College students in the broadcasting program each year.
6535 Part of the TCM budget is allocated to helping others. Over our 13 years we have financially supported every not-for-profit Christian station in Canada. We have helped them during start-up. We have helped them during their fundraising campaigns.
6536 Several of us have gone on location to provide training and to exchange ideas. Our Station Manager, Scott Jackson, has visited almost every Christian station in the country, with the purpose of giving back.
6537 So, giving back to other stations is part of our mandate as an organization.
6538 MR. KARIM: I'm a Canadian who grew up outside the country, and can personally testify to how difficult it can be to plug into the Christian community after immigrating to Canada. Many immigrants often look to the church for support when coming to a new country, but often do not know where to begin.
6539 Our station will serve as a starting point for many people to become aware of the richness and diversity of Toronto's Christian community, which includes many vibrant churches from the city's Korean, Chinese, Spanish, Caribbean and many other ethnic communities.
6540 MR. JACKSON: I love radio. When I was a teenager, just getting into music, I would go to bed with my radio on, listening to 1050 CHUM every night. I knew all the songs, all the words, but when I got into radio as a career, I realized why I loved CHUM so much. It was because CHUM built listener loyalty.
6541 I was more than a listener, I was a fan, and the DJ was like my friend. The whole station made me feel good. It was my companion.
6542 When I design radio stations, I try to re-create that personal vibe, to make us like a friend to the listener, tell them the weather so they can plan their weekend, give them information about things they care about, go on location where you can actually meet them.
6543 I guess it may sound like the golden days of radio, but the theory still works for us, and that's the feeling we want to create with our station in Toronto, a station that lives the life we talk about and DJs who love the music just like the listeners.
6544 MR. HAMILTON: Thanks, Scott.
6545 At the beginning of our presentation, our video showed why Christian radio is needed in Toronto, and now you know how we intend to accomplish it.
6546 With hopes of bringing Christian Radio 88.1, here is our top 10 list which we hope sets our application apart from and above our competitors.
6547 Number 1, listeners will get a music format not available on Toronto FM radio station today.
6548 Number 2, Canadian artists will get air play because no other Toronto station is dedicated to the development of Christian music.
6549 Number 3, we represent a new, diverse voice where there are already dozens of publicly-traded broadcasting companies.
6550 Number 4, we're offering 12 percent Can con, which is over and above the regulation.
6551 Number 5, we're not obligated by regulation to provide any CCD funding because of our charity status, but we're very happy to offer artist support of $97,000 over seven years and $20,000 a year every year that follows.
6552 Number 6, our impact on other stations in Toronto will be negligible. Our revenue source really is unduplicated.
6553 Number 7, our decision of local programs like Toronto Today makes us relevant to the Toronto audience.
6554 Number 8, TCM has a 12-year history of staying in the black every year, not needing a loan, always debt free.
6555 Number 9, our station keeps Canadian advertising dollars in Canada instead of losing them to a station in the United States.
6556 And number 10, we'll bring back people to the radio from their mp3 players, from their satellite radio and from internet radio.
6557 Thank you for your time. I hope we've provided you with the evidence that you were expecting from us, and we look forward to your questions.
6558 THE SECRETARY: Thank you very much.
6559 We will now proceed with the presentation from Rev Janet Howse from the Christian Assembly in Toronto.
6560 Rev Howse, you have five minutes for your presentation. You may now proceed.
6561 REV HOWSE: Thank you.
6562 The vision of Canadian Radio-Television Telecommunications Commission is to promote competition, innovation, consumer choice and Canadian reflection in order to foster a world-class communications system benefitting all Canadians.
6563 I am before you today in support of that vision and on behalf of Trust Communications Ministries in their application for a Toronto radio licence. I'm grateful for the opportunity to share with you today some of the reasons why the plans and vision of Trust Communication furthers your own CRTC vision.
6564 In my capacity as a senior pastor of a large, multi-ethnic Toronto congregation, I am constantly connecting with individuals of all ages, backgrounds and walks of life. The most recent demographic survey of our congregation revealed members from over 45 different nations meeting together regularly for worship and fellowship.
6565 My church, Malvern Christian Assembly, on the corner of Neilson and Sheppard in Scarborough, is representative of thousands of congregations meeting at least weekly across this diverse city. Stats Can statistics confirm that more than two-thirds of the population of Greater Toronto claim some form of Christian affiliation.
6566 The challenge for me, and perhaps for all of us here today, is to determine how we facilitate the CRTC's vision of "benefitting all Canadians" when approximately four million GTA listeners have no spot on the radio dial at present that adequately meets all of their listening needs.
6567 What does it mean to foster a world-class communications system? Looking at other world class cities like New York, Los Angeles and Chicago, all of them provide the style of broadcasting that Trust Communications is applying for today. Even Buffalo has WDCX where, incidentally, Toronto businesses are already spending advertising dollars.
6568 We like to think of Toronto as a world-class city, but currently this style of broadcasting is absent from Toronto airwaves. There are 41 Christian radio stations presently in operation across Ontario from Wawa to Apsley, yet none in Toronto.
6569 The experts on the panel today know better than I how difficult, in fact virtually impossible, it is for Torontonians to pick up any of these stations.
6570 Trust Communications has successfully operated LIFE 100.3 from their Barrie, Ontario location for the last 13 years. They have developed a family values format which attracts listeners of all ages, a format that has stood the test of time already and attracted a broad audience. Their programming style does not include songs containing lyrics riddled with sex, drugs, violence and misogyny. It seems to be working.
6571 At MCA, we became aware of LIFE a few years ago when several people from our church who, because of work or travel plans, were able to listen to 100.3, began asking why no similar broadcasting was available in the city where they lived and attended church.
6572 They loved the format; they identified with the style and the on-air hosts. They questioned why such great programming was only to be found outside the city of Toronto.
6573 We got connected with Scott Jackson and Ben Davy, morning men at LIFE, and learned of their vision for expansion in the Toronto market. Our Board was moved to consider LIFE as one of the candidates eligible to receive Missions funding from donations by MCA members. That was three years ago.
6574 Our membership is overwhelmingly in support of their plans now and we have made, so far, two substantial contributions, with more planned in the future.
6575 The CRTC can take comfort that Trust Communications intend to bring a tested, commercially viable product into Canada's largest radio market, providing the consumer choice that you advocate in your vision. In addition, the new station will be a registered charity, similar to the Barrie operation, with local churches standing alongside to provide encouragement and financial support.
6576 With a presence in Toronto, more local churches can be expected to catch the vision and support this initiative, particularly in their critical early years.
6577 Larger Toronto churches are always looking for more effective advertising vehicles for regular services, events, concerts and community involvement. To date, we are restricted to community newspapers and flyers. Radio has proven to be much more effective, and many of us are looking forward to advertising opportunities with this new venue in Toronto.
6578 What is innovation if not the introduction of a new sound, a new style and a new format into the Toronto radio market? With Trust Communications, you have that opportunity.
6579 We have been fortunate at Malvern Christian Assembly over the years to have worked with Christian recording artists like Mark Masri, Hiram Joseph and two-time Juno award winners, Toronto Mass Choir. These are all world-class talents and topnotch reflections of Canadian content. But surely we could agree their opportunities have been somewhat muted while they try to remain faithful to their roots, despite no easy access to the largest market.
6580 They are but three examples of a host of gifted Canadian artists who would benefit from increased exposure and enhance CRTC's desire to showcase Canadian talent.
6581 I've been fortunate as a pastor to witness the positive impact that Christian music has made in the community surrounding our church.
6582 Throughout the year, we host a number of different community events inside and outside the building; Canada Day, International Festival, Taste of Malvern, to name a few. One of the main features at all of these events is upbeat and uplifting Christian music.
6583 LIFE 100.3 has established a pattern of community involvement in and around Barrie. We can safely assume a similar level of engagement by the new radio station on an even grander scale throughout the GTA.
6584 If you will give Trust Communications the opportunity to deliver this same type of music in this city, I am confident we will see the same positive impact that we have experienced in the Malvern community.
6585 In conclusion, I come back to where I started. You are a powerful agent of the government of Canada with a great vision.
6586 While I do not have your broadcasting background or expertise, what I do know is this. Every week between 1,300 and 1,500 people of widely diverse cultures and origins gather together joyfully and enthusiastically at 6705 Sheppard Avenue in Scarborough. Visitors often exclaim, "This is just like the UN" when they experience firsthand so many different nationalities all together, enjoying each other's company and truly caring for one another.
6587 The music is glorious and uplifting but, sadly, it is all kept within the building. Until now. You have the power to change that; perhaps not for all Canadians overnight, but certainly for four million of us.
6588 Thank you. Merci.
6589 THE CHAIRPERSON: Thank you all very much.
6590 I would ask Commissioner Patrone to lead the questioning.
6591 COMMISSIONER PATRONE: Thank you, Mr. Chairman.
6592 And thank you very much for your presentation today. And Rev Howse, it was interesting to hear that you have such a great diverse collection of people who are attending your services.
6593 You certainly all have a very strong passion for Christian radio, and I think you should be applauded for that.
6594 Applicants who've been appearing before us, as you're probably aware, have spoken about the need to fill a void in the Toronto market, and that void may be musical, it may be talk or local reflection related. It may be ownership diversity or certain ethnic appeal.
6595 Now, you have spoken a little bit about the need for Christian radio station, but I'd like you to address the matter of diversity and how you're going to bring diversity to the Toronto market through your radio station.
6596 MR. JONES: Yeah. I think in our presentation we referred to how difficult it can be for Christians who move to Toronto from other countries and initially where to start, and sometimes it can be as difficult as finding a church to attend, as Pastor Janet was just speaking about.
6597 I think through our public service announcements, through our interviews that we've also promised that we can -- all they have to do is turn on the radio and they can be pointed in a direction of what is the Spanish church doing, what is the Caribbean church doing, and through our public service announcements and those interviews, that can point them in the right direction, for sure.
6598 COMMISSIONER PATRONE: I think I addressed you as Rev Howse. Is it Pastor Howse?
6599 REV HOWSE: That's correct.
6600 COMMISSIONER PATRONE: It is "Reverend". Thank you.
6601 As you noted in your video and you just brought it up, Toronto's ethnic and religious make-up is very diverse. And given that diversity, why would a Christian station get the last slice of radio spectrum?
6602 MR. JACKSON: Well, we've seen that there's so many Christian radio stations across the country even in smaller cities, and they're successful doing that. We just think that the largest city in the country with so many people, it's filling a void that is -- it's void here now.
6603 COMMISSIONER PATRONE: Yeah. Where I was going with that was just in relation to the many different faiths that are currently available in Toronto. And how is it that you can help us understand why we should address the needs of the Christian community?
6604 MR. JACKSON: Yeah, sure.
6605 In our research, we found out through Stats Canada that 65 percent of Torontonians consider themselves Christians. As we went down the religious list to see what the components, the religious components of the city would be, we found that Islam was 5.5 percent, Hindu is four percent and so on.
6606 So 16 percent have no religion affiliation, but with 65 percent of the population claiming some form of Christianity, we think that we've got a large audience to serve.
6607 COMMISSIONER PATRONE: Yeah, you're talking about two-thirds, according to the Stats Can figures, which might suggest that there is a pent-up demand for Christian radio, but you must agree that there aren't that many people packing the churches.
6608 We don't have two-thirds of the population in Toronto attending Mass or other Christian services every Sunday.
6609 Is there a disconnect between those who consider themselves Christian, you know, for the sake of a Stats Can survey and those who believe and live the faith to the degree that they would listen to your radio station?
6610 MR. JACKSON: Well, I'm sure that there's people -- Christians have different levels of their faith, how they're living it out. Some are new Christians, some are mature Christians. Some take it more seriously than others. Some would attend church every week, maybe twice a week. Some maybe only go at Easter and Christmas.
6611 But that doesn't mean that they're not Christians or they don't have faith, and we've seen that from going to concerts they flood concerts in Toronto. I think we would get maybe more people at concerts, maybe for a second night, if they were exposed to the music. But it's just -- it's for all Christians of any amount of faith.
6612 MS BAIRD: I -- we are hoping that we will get Christians that are maybe just not enthusiastic about their faith excited again and back into the churches. That is what we're hoping, so that they'll get reunited with their God and want to go back to church.
6613 COMMISSIONER PATRONE: It's about saving souls.
6614 MS LOPEZ: If I could add, Christian radio is very family friend. There's no provocative lyrics. There aren't any songs that worship drugs, and most of the content is about benefiting your community, being a good person. That's the type of music that Christian radio plays.
6615 I have worked at Christian radio stations in other cities. Out west, in Edmonton, Calgary I have spoken with listeners who are not even Christian and they listen to Christian radio just because of the format of the music, that they feel comfortable that they can have their children in the cars when they have the radio on.
6616 So I think that even if it is a Christian station and that is the type of music that we play, even non-Christians will be able to relate because of the family friendly programming.
6617 COMMISSIONER PATRONE: I want to talk a little bit about format a little later, Ms Lopez.
6618 First off, however, I'd like to talk about your financial forecasts because they're fairly optimistic, a positive PBIT margin as of year two and reaching 36 percent by year seven.
6619 That's fairly optimistic given the state of -- the financial state of what we would say is the majority of Christian specialty stations in Canada. Many of them, as you're probably aware, do struggle to maintain -- to get the level of profitability that would help them, you know, continue doing what they do.
6620 How are you going to do what other Christian stations are having such a hard time doing right now?
6621 MS BAIRD: Well, first of all, Scott Jackson has over 30 years in the business. He's a radio broadcaster, and a lot of them -- we know personally a lot of the other Christian radio station owners and they do not have radio backgrounds.
6622 So first of all, we have that.
6623 He is also an amazing businessman. He builds a budget every year and salaries alone are around 500,000 in Barrie, and he hits it within 5,000 every single time. He's just an amazing businessman.
6624 So these projections are based on our 13-year history. We've never -- as you heard, we never needed a loan or anything like that. We've always made a profit.
6625 Even in those hard economic times two or three years ago, we still hit our goals, so we are totally confident that we can hit these goals on this piece of paper.
6626 COMMISSIONER PATRONE: You're proposing a not for profit, listener supported station.
6627 MS BAIRD: Correct. We can take donations because we are a charity, and we also have advertising dollars.
6628 COMMISSIONER PATRONE: Your start-up costs will be covered through donations as well?
6629 MS BAIRD: A lot of them, yes.
6630 COMMISSIONER PATRONE: How long do you expect it will take to generate enough money through donations to bankroll a start-up in Toronto?
6631 MS BAIRD: We're guessing less than 12 months. It only took Scott about five months to do it for Barrie, and he didn't know anybody.
6632 Now we know half the population in Barrie and they can tell their friends on Facebook please donate to this new Toronto station and we can have the word out in an instant. And we have no worries that we will get the donations that we need quickly.
6633 COMMISSIONER PATRONE: So you have a 12-month target for launch?
6634 MS BAIRD: Yeah, between 12 and 24. We're hoping for earlier, but you never know. But we're hoping for 12.
6635 COMMISSIONER PATRONE: Have you already begun taking pledges in anticipation of perhaps being licensed in the future?
6636 MS BAIRD: We have not asked for donations yet, but we already have some.
6637 COMMISSIONER PATRONE: Is there a back-up plan; in other words, is financing available through other sources or -- if you find that those donations are not up to snuff?
6638 MR. JACKSON: Yes, we would -- we are starting a fund-raising position in Barrie which we have just started so that the idea there is to find new dollars beyond advertising and beyond donations.
6639 These would be business donations from businesses in our area, and we would do the same thing in Toronto.
6640 COMMISSIONER PATRONE: You project that half your add revenue will come from churches and ministries who do not currently advertise on secular stations because of the -- what you term as the astronomical rates. Is that correct?
6641 MR. JACKSON: Yes.
6642 COMMISSIONER PATRONE: So you'll be selling ad time on deep discounts. Is that a fair assessment of your business plan going forward?
6643 MR. JACKSON: I'm not sure about the deep discounts, but at a lesser rate than like a CHUM FM would be charging, certainly.
6644 It would be affordable for churches and small businesses.
6645 COMMISSIONER PATRONE: Is there a business case based on rates that no commercial station would charge?
6646 I mean, you'll still be operating in Toronto, which is an expensive place to do business, and so my question is, on the revenue side, where you're offering discounts -- discounted rates for clients whom you say don't want to pay exorbitant rates that they would have to on secular stations.
6647 MR. JACKSON: Right.
6648 COMMISSIONER PATRONE: So if your revenues as far as ad sales are concerned are not going to be at the level that -- and I'm talking about revenue numbers are going to be at the level that a commercial station would charge, but yet you're operating in an environment where your expenses are still going to be what they are and working and operating in Toronto.
6649 MR. JACKSON: Yes.
6650 COMMISSIONER PATRONE: How are you going to make those ends meet? Can you help me understand that?
6651 MR. JACKSON: Sure. Our expenses will be less because we don't have to pay the top talent price that they would have to pay at a major station in Toronto.
6652 We would have three different levels of advertising revenues. The first would be retail. The second would be for not for profit organizations, and the third would be for churches, churches being about $10 a commercial, which is about as much a church can afford. It even allows a church to get on the radio.
6653 COMMISSIONER PATRONE: I noticed that on page 7 of your oral, you spoke about your CCD contributions, which I believe staff has noticed that it is $500 less in your oral commitment than it was in your written.
6654 And I just wanted some clarity. Is it 97,500 over seven years or 97,000 over seven years, as is stated in your oral presentation?
6655 MR. JACKSON: We'll have to multiply that one more time. Whatever it is for each year, that's what we are committed to. Perhaps we added the tally wrong.
6656 COMMISSIONER PATRONE: It's just a difference in numbers of $500 between what we saw in your written application as what we have here in your oral, so we'd just ask for some clarification around that.
6657 Do you want to come back and file that later, if that helps?
6658 MR. JACKSON: Certainly. We'll do that.
6659 COMMISSIONER PATRONE: What news or staffing synergies are you expecting to exploit with respect to your Barrie station?
6660 MR. JACKSON: Well, in the beginning, or do you mean ongoing? To start?
6661 COMMISSIONER PATRONE: Yes.
6662 MR. JACKSON: Okay. Well, the expertise right now in Barrie, so we would help get it started by casting vision, by hiring the people that we need. There'd be some synergies, certainly, with bookkeeping to get us started. And then once we grow into, hopefully, the second year or the third year, that's when we can hire staff and it would be more stand-alone other than accounting.
6663 COMMISSIONER PATRONE: Okay. So you're talking about human resources, admin, those types of synergies. Do you anticipate they would come into play?
6664 MR. JACKSON: Yes, they would.
6665 COMMISSIONER PATRONE: In terms of exchange of content between your Barrie station and your Toronto station would you expect that there would be swapping of news stories, for instance?
6666 MR. JACKSON: Yes, sir. I hope they would. Two heads are better than one.
6667 So more people would be contributing and if there is a story that comes out of Toronto that can be used in Barrie then we would be happy to use that and swap stories.
6668 COMMISSIONER PATRONE: Yes.
6669 MS LOPEZ: And because there is only one newsperson to start in Toronto, of course that newsperson would then be making all the contacts within the community whether that be with the school boards, with the health boards, getting all the contacts for the police.
6670 In Barrie they have all their established contacts there, so by having them as a friend to be able to contact with if there was something going on, let's say, in York Region, like I think recently there was that whole orange fiasco in the news. It was something that was out of York Region.
6671 However, it was a story, a top story that was being run in Toronto and because we have the resources in Barrie to be able to contact the local officials in York Region or Stouffville which is where that orange story had occurred, then they would be able to perhaps even pass on some of those interviews to the Toronto station.
6672 And vice-versa, if there was something on in Toronto that was a big news story it would be able to feed the Barrie station. So they would work in that synergy.
6673 COMMISSIONER PATRONE: And did I hear you say that there was just one staffer in Toronto?
6674 MS LOPEZ: For the beginning, yes, for the news. And they would be doing the morning news and the noon newscast as well.
6675 COMMISSIONER PATRONE: Well, that individual is going to be busy.
6676 MS LOPEZ: They will be very busy.
6677 MS BAIRD: If I can interrupt for one moment, the 97.5 in our application is correct. The 97,000 was just a typing mistake.
6678 COMMISSIONER PATRONE: Thank you, Ms Baird, I appreciate that.
6679 The Barrie station derives some tuning from parts of the GTA currently, is that correct?
6680 MR. JACKSON: In the GTA as far down as Newmarket, yes, if Newmarket is included in the GTA. The boundary seems to be a little blurred.
6681 COMMISSIONER PATRONE: I realize -- yes.
6682 Did you derive any revenues from what you would say the Newmarket area?
6683 MR. JACKSON: Yes, we do. Commercial revenue, yes, we do.
6684 COMMISSIONER PATRONE: And do you, further to that, anticipate cannibalizing part of your own Barrie tuning revenues with the Toronto station?
6685 In other words, do you see a potential for sort of undermining your own revenue source as currently being derived from the Newmarket area, assuming you were to get a licence to Toronto?
6686 MR. JACKSON: I anticipated that question.
6687 I think perhaps in the first year there will be some businesses that cannot expand their budgets but after that, after they have seen the success in the listenership of the new Toronto station then many of them will expand their budgets.
6688 In Barrie none of them had radio budgets for Christian radio to begin with, yet here we are. So once they saw the success then they put it in their budget.
6689 COMMISSIONER PATRONE: I want to shift gears and talk a little about programming. You are committing 42 hours of local programming per broadcast week?
6690 MR. JONES: Yes, that is the minimum.
6691 COMMISSIONER PATRONE: Can you tell me a little more about what you intend to air in the remaining 84 hours?
6692 MR. JONES: Sure.
6693 Yeah, we do have a plan to have a live morning show. Initially we would voice-track the midday show. Afternoon drive would be live and evenings would be live and local too.
6694 So eventually we would like to go live 24 hours a day but the initial plan is mornings live, afternoons live and evenings live.
6695 COMMISSIONER PATRONE: Voice track, so everything that you air in the afternoon is going to be canned?
6696 MR. JONES: Middays.
6697 COMMISSIONER PATRONE: Midday, sorry.
6698 MR. JONES: Yeah.
6699 COMMISSIONER PATRONE: And any plans to bring in syndicated programming at all?
6700 MR. JONES: We do have one program that we mentioned in our application, CT-20. It's across Canada, a countdown show.
6701 COMMISSIONER PATRONE: As you know Joy 1250 is in business. You have spoken to a great degree about the lack of a Christian station in Toronto, and I understand that. But to what degree is Joy, as you see it, providing a Christian service that is accessed by at least some of the Toronto market?
6702 MR. JACKSON: Yes, they are definitely providing a Christian service. It's mostly talk programming with some music whereas we would be a music service.
6703 But they don't serve all of Toronto. I could not pick them up in Scarborough.
6704 COMMISSIONER PATRONE: And so you feel that your service is needed to fill out the rest of the GTA?
6705 MR. JACKSON: Yes, but I think it's a bit of a different animal because we are on FM and when people are looking for music they generally gravitate toward FM and AM which, I guess, died about 20 years ago, has come back with talk programming.
6706 They seem to be very successful at doing that. And we know them quite well. We are good friends with them.
6707 COMMISSIONER PATRONE: And I guess as you spoke about it, Mr. Brown, Christian radio is somewhat unique in that it's distinguished by its lyrical content more so than its instrumental part. You know what I'm saying? I mean you can have heavy metal Christian. You can have kind of folk Christian. I don't think there is any punk Christian but, you know, it's possible.
6708 Do you intend to sort of have a range of musical genres as they approach the music side of the operation, if you know what I'm saying, or are you going to have sort of one style of sort of rock or pop, that kind of --
6709 MR. BROWN: I am going to have to defer that question to you.
6710 COMMISSIONER PATRONE: Okay.
6711 MR. JONES: Yeah, sure.
6712 During the day we plan to have -- so basically from the morning until seven o'clock at night it will be more of a hot adult contemporary format. In the evenings it will switch to target teenagers and young adults to be more of a CHR format which would be a mix of rock, pop and hip hop.
6713 COMMISSIONER PATRONE: Okay.
6714 As you know CCD initiatives must be deemed to be eligible in order to receive CCD funding. In your application you indicated that as part of your CCD initiatives you would fund the recording sessions and CD productions of a new independent artist who produced contemporary Christian music.
6715 Could you please confirm that the studios used for these recording sessions would be those of a third party, not recorded in-house?
6716 MR. JACKSON: Yes, absolutely.
6717 COMMISSIONER PATRONE: Okay. That's almost all my questions.
6718 I did have a question; however, as you spoke a little bit about lost tuning to the Buffalo station. It got me wondering whether you had any numbers or even anecdotal reports of people that you were aware of here in the GTA who were tuning into the Buffalo station.
6719 I don't know if you have spoken to anyone like that, Reverend Howse, or whether anyone on the panel wants to discuss lost tuning?
6720 MR. JACKSON: Well, we have heard from listeners who commute to Toronto from Barrie because it tends to be a bedroom community and when they lose our signal around Canada's Wonderland area then they tune to WDCX.
6721 We hear about it a lot. It's kind of a thorn in our sides. We wish we could provide for them but they are listening to an American station. We hear it all the time.
6722 REV. HOWSE: If I could address that as well --
6723 COMMISSIONER PATRONE: Please.
6724 REV. HOWSE: -- our church, as I said, is very large, anywhere from 1,300 to 1,500 attend every Sunday and I would say the majority do listen to WDCX. They all have their bumper stickers on their cars and are so looking forward to one in Toronto.
6725 I guess the sad thing as well is even in our church, as I mentioned, some of the Canadian artists -- Mark Masri lived and was born in Malvern Christian Assembly and is a fantastic artist that is now gone to the United States to be a more successful recording artist.
6726 The sad story is that they cannot remain here. They cannot expand. They cannot continue to grow as artists because there is no one that would play their music here in Toronto.
6727 COMMISSIONER PATRONE: Yeah.
6728 REV. HOWSE: And also if I could add, your comment about people attending churches, I think often we go with what we see on T.V.
6729 And it's one of my pet peeves that all of the newscasts will always go to a little tiny church to see the crowds at Christmas and Easter and you will probably recall that most churches are empty and those that do have people are usually grey-haired people. That could not be any more false or further from the truth. My church is located at Nielson and Sheppard. There are 1,500 of us.
6730 The church down the street, Global Kingdom Ministries, has 1,500 people attending every Sunday and the one five minutes away at Kennedy and Finch has 2,400 people attending every Sunday. And Queensway Cathedral on the Queensway has over 3,000 people attending every Sunday.
6731 And so there are many, many Christians who attend church and also who are great citizens of the city of Toronto that I believe deserve to have a place where they can enjoy music, news, family values, good news and a program and a radio station that promotes a positive lifestyle and positive impact on their life.
6732 COMMISSIONER PATRONE: Well, I wish you continued success.
6733 REV. HOWSE: Thank you.
6734 COMMISSIONER PATRONE: Thank you very much for your presentation.
6735 REV. HOWSE: Thank you.
6736 COMMISSIONER PATRONE: Mr. Chairman...?
6737 THE CHAIRPERSON: Thank you. I have got a couple of questions and perhaps my fellow Commissioners do as well.
6738 I want to take a look at your start-up capital expenses just to understand it. There was a submission that you made that actually had -- it was called "Total Pre-Operating Costs of $186,958". Do you have that?
6739 MR. JACKSON: Yes.
6740 THE CHAIRPERSON: Can you explain to me the two items on here that I'm concerned about particularly, the transmitter costs of $53,000 and the transmitter tower?
6741 It says two months for $10,000. I gather that's a rental. Is that for for rent?
6742 MR. JACKSON: It's leasing space on the tower.
6743 THE CHAIRPERSON: Okay. And the cost of the transmitter is $53,000?
6744 MR. JACKSON: That's correct.
6745 THE CHAIRPERSON: Have you identified a location where you are going to putting that up?
6746 MR. JACKSON: Yes.
6747 Paul, could you address that?
6748 MR. FIRMINGER: Yeah. The engineering brief is based upon the First Canadian Place in Toronto. It would probably be Tower Two on the rooftop there.
6749 THE CHAIRPERSON: And they would charge you -- it will cost you only $53,000 to put that up?
6750 MR. FIRMINGER: No, the rental there is about $60,000 per year. Scott is just talking about the basic item, the transmitter and the processor.
6751 If you recall, it's only 800 watts. So it's a very small transmitter. The cost is not expensive.
6752 THE CHAIRPERSON: Okay.
6753 My other question is on your ownership data, Appendix 2 I guess it is, of your filing. You have got a list of three people that are on the board of directors, a secretary, a treasurer and a chairperson. And then there is a footnote that says that the chairperson has an additional vote.
6754 So basically, does that mean the chairperson automatically has veto power over every decision that's made by this board?
6755 MR. JACKSON: I guess if it came down to a final decision then, yes, they would have the extra vote. We tend to be unanimous with the decisions, though.
6756 THE CHAIRPERSON: But I mean, given that it's a three person board then the only way that that chairperson could exercise his second vote is if both the secretary and the treasurer voted against him and then he I guess, exerts his second vote so now it's a tie of 2-2.
6757 So my question then to you is does he also have the deciding vote as well?
6758 MR. JACKSON: We'll have to look into that and get back to you.
6759 THE CHAIRPERSON: Okay. Those are my questions.
6760 Commissioner Simpson, I think, had some questions first?
6761 COMMISSIONER SIMPSON: Yes, thank you very much, just a couple.
6762 On your Top 10 list, I was just curious on number two. You say Canadian artists will get airplay because no other Toronto station is dedicated to the development of Christian music.
6763 Did you mean to say Canadian Christian artists or is there something -- it seems an incongruous statement that because this will be a Christian radio station Canadian artists will get airplay, implying that other stations won't be playing Canadian.
6764 MR. HAMILTON: That's a great question. I would agree with you. It is Canadian Christian artists, is our focus on that.
6765 COMMISSIONER SIMPSON: Okay.
6766 The only other question I have got goes to the Buffalo station. In item nine you are saying the station -- "Our station keeps Canadian advertising dollars in Canada" which is a good thing "instead of losing them to a U.S. station".
6767 Do you have any idea of what the migration of Canadian advertising dollars is to that station? You know I know that you have got revenue projections to yours but I'm just curious about what that dollar amount currently is, because obviously you have identified it as part of your revenue.
6768 MR. JACKSON: No, I don't know the dollar amount and some of it could be cash, some of it could be contra. So it's difficult for us to tell.
6769 COMMISSIONER SIMPSON: M'hmm, okay.
6770 MR. KARIM: Could I weigh in on that for a minute?
6771 COMMISSIONER SIMPSON: Yes, please.
6772 MR. KARIM: Our newspaper works closely with Christian events and the Canadian advertisers -- a lot of the Canadian advertisers that go to WDCX are listed on their website. They have a section for --
6773 COMMISSIONER SIMPSON: I'm looking at it right now.
6774 MR. KARIM: Yeah, and I know that certainly one of our advertising partners is Faith Family Books which is the largest Christian newspaper -- sorry, the largest Christian bookstore chain in the province. And they are an advertising partner.
6775 And WDCX also comes up here regularly to do in-store events and also they were at the MissionFest Conference -- that they are regularly at the MissionFest Conference that was mentioned in Janice's presentation. So they would take a lot of advertising from a lot of those ministries that --
6776 COMMISSIONER SIMPSON: Yeah, I have noticed that, you know, in the listing of advertising support I would say that of the quantum of that listed about 50 percent seem to be coming from the Ontario supporters.
6777 MR. KARIM: Yes, several years back I remember just anecdotally hearing reports that actually they took more advertising out of Toronto than they did in Buffalo.
6778 COMMISSIONER SIMPSON: Yeah, I wouldn't be surprised. I noticed you know your masthead is indicating WDCX is appealing to Buffalo, Toronto and beyond since 1963.
6779 Just a last question. I always have a bit of a programming bent in the questioning that I go into.
6780 In implying that this radio station is really other than our Barrie friends, you know really the only single source for any type of Christian programming, my inclination as I was listening to it last night actually -- but what I found interesting is that it's predominantly talk. It's predominantly syndicated talk like very recognized veteran broadcasters like Chuck Swindoll, you know, who I have heard his program "Insight for Living" on a lot of stations across America.
6781 This seems to be a syndicated talk-type radio station that is very typical of all types of commercial and non-commercial offerings in the States.
6782 Do you feel that the music format that you are offering to go with your news information content is going to be sufficient to bring people to your station getting their inspiration, if you like, from music rather than the type of talk that perhaps gentlemen like Swindoll offers?
6783 MR. JONES: Yeah. I think what we have realized, even in Barrie, is that you tend to have -- just like anybody else there is -- Christians are the same as everybody else. Some people like talk shows. Some people like music.
6784 And so we have realized that when the talk shows are on people will listen but there is a real hunger for music. As we said in our presentation, a lot of people are unfamiliar with Christian music, especially in Toronto right now.
6785 We could name some of the Top 10 artists who are on the American charts right now and they would have no idea who they were. We could name the Top 10 Canadian artists and they would have no idea who they were.
6786 So by introducing Christian radio in Toronto, it would be a completely new, exciting development for people who have never heard it before, similar kinds of music that they are used to hearing on the radio but with a different message.
6787 COMMISSIONER SIMPSON: Okay, thank you.
6788 That's the total of my questions.
6789 COMMISSIONER POIRIER: Hello.
6790 Your revenue relies a lot on donations or listeners of support, 58 percent. Total amount is $610,000. It's a lot of money.
6791 Okay. How reliable is that amount of money because you never know --
6792 MS BAIRD: Can I say something?
6793 COMMISSIONER POIRIER: -- if you are good, if you are not good, if the economy is good, doing well; not doing well. What?
6794 MS LOPEZ: Christians are very charitable.
6795 COMMISSIONER POIRIER: No, but I mean it's 58 percent of the total amount of money. It's a lot of money and you have to convince us that indeed it's an amount of money you can rely on.
6796 REV. HOWSE: If I could address that? Just our church alone has a budget of $2.5 million a year and the churches that I have mentioned to you are even greater.
6797 We are committed to supporting the station. So, really, you know we have hundreds -- really, hundreds of churches in the Toronto area that are that large to reach this budget that you have mentioned is not difficult at all.
6798 MS BAIRD: So we have an annual share-a-thon, we call it. It's like a telethon but we -- it's on the radio and, as we mentioned, we have succeeded our goals even in the hard economic times. So we will do that in Toronto.
6799 We have budgeted a certain amount in Barrie for walk-in, off the street donations and we surpass that every year. These are people we don't solicit. We don't know who they are. Half the time they just drop off an envelope and they leave. They don't even want a receipt. It's just something we can budget for because it's been on-going since the start.
6800 And then we also have the fundraising position that Scott mentioned. So I have no doubt that we can reach that number, no doubt whatsoever.
6801 COMMISSIONER POIRIER: Okay. I'm asking the question because many campus and community radio stations rely on that same kind of funding and it's getting harder and harder to get that amount of money. So you are fully trustful that you will get the first year that amount of money?
6802 MS BAIRD: Yes, based on our experience in Barrie, no question.
6803 COMMISSIONER POIRIER: Okay, okay.
6804 My second question, I have heard a lot about positive news and, yesterday I was questioning Family FM. They had the same kind of vocabulary.
6805 So I wonder, how much do you differentiate yourself from Family FM who is in competition with you?
6806 MS LOPEZ: With news you have to present the facts. However, the way that it is presented on a family station, I think, would be very similar to on a Christian station because you have to mention exactly what happened but the phrasing that you use is not if it bleeds it leads. That's not our motto. We basically want to present the information in a way that is factual; however, it does not get into the gruesome details.
6807 COMMISSIONER POIRIER: Okay, but let's say I'm not talking only about the news. I'm talking about the attitude of the host, the kind of programming you have it is some kind of a positive programming you have.
6808 So how can it differentiate itself from one of your competitors, Family FM, who said exactly the same thing: We want to bring Toronto good news and a positive way of seeing life with good values and so on?
6809 So it's not only about the news I'm talking. It's about the programming.
6810 MR. JONES: Yeah, I think what we have noticed is -- and we mention it in our presentation about how our listeners, as we just mentioned, are willing to give to something to believe in or something they believe in.
6811 In this case it's music that points to a higher power. And when they hear music like that they initially get attracted to it and they are excited about it, so much so that they are willing to give to keep it on the radio.
6812 COMMISSIONER POIRIER: But they too rely on their lyrical content to try to attract listeners. So I was wondering. You see not much of a difference with their content then.
6813 MR. JONES: I see it as completely different. The content of their playlists and the content of our playlists would be different.
6814 COMMISSIONER POIRIER: Okay. So the musical content is, okay, different.
6815 MS LOPEZ: And also in terms of the announcers that would be speaking on the radio, they talk about that higher power, whereas in a family FM station they would probably not refer to that.
6816 COMMISSIONER POIRIER: Thank you very much.
6817 THE CHAIRPERSON: I think that completes our questions. Thank you very much for appearing before us and submitting your application.
6818 Madam Secretary?
6819 THE SECRETARY: This concludes the hearing, Mr. Chairman. We will adjourn and reconvene tomorrow at nine a.m.
--- Whereupon the hearing adjourned at 1635, to resume on Friday, May 11, 2012 at 0900