ARCHIVÉ - Transcription - Winnipeg, Manitoba - 2002-02-04
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TRANSCRIPT OF
PROCEEDINGS
FOR THE CANADIAN
RADIO‑TELEVISION AND
TELECOMMUNICATIONS
COMMISSION
TRANSCRIPTION DES
AUDIENCES DU
CONSEIL DE LA
RADIODIFFUSION
ET DES
TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Multiple broadcasting applications &
BROADCASTING applications further to Public Notice 2001-79 "Call for
applications for a broadcasting licence TO CARRY ON A RADIO PROGRAMMING UNDERTAKING
TO SERVE WINNIPEG, MANITOBA".
MULTIPLES DEMANDES EN RADIODIFFUSION ET
DEMANDES EN radiodiffusion suite à l'avis public CRTC 2001-79 "APPEL DE DEMANDES DE
LICENCE DE RADIODIFFUSION VISANT L'EXPLOITATION D'UNE ENTREPRISE DE
PROGRAMMATION DE RADIO POUR DESSERVIR WINNIPEG (MANITOBA)".
HELD
AT: TENUE
À:
Winnipeg
Convention Centre Winnipeg
Convention Centre
PanAm
Room Salle
PanAm
375
York Avenue 375,
avenue York
Winnipeg,
Manitoba Winnipeg
(Manitoba)
4 February, 2002 le
4 février 2002
Volume 1
Transcripts
In
order to meet the requirements of the Official Languages
Act,
transcripts of proceedings before the Commission will be
bilingual
as to their covers, the listing of the CRTC members
and
staff attending the public hearings, and the Table of
Contents.
However,
the aforementioned publication is the recorded
verbatim
transcript and, as such, is taped and transcribed in
either
of the official languages, depending on the language
spoken
by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les
langues
officielles, les procès‑verbaux pour le Conseil
seront
bilingues en ce qui a trait à la page couverture, la
liste des
membres et du personnel du CRTC participant à
l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte
rendu
textuel des délibérations et, en tant que tel, est
enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television
and
Telecommunications
Commission
Conseil de la
radiodiffusion et des
télécommunications
canadiennes
Transcript /
Transcription
Multiple broadcasting applications &
BROADCASTING applications further to Public Notice 2001-79 "Call for
applications for a broadcasting licence TO CARRY ON A RADIO PROGRAMMING
UNDERTAKING TO SERVE WINNIPEG, MANITOBA".
MULTIPLES DEMANDES EN RADIODIFFUSION ET
DEMANDES EN radiodiffusion suite à l'avis public CRTC 2001-79 "APPEL DE DEMANDES DE
LICENCE DE RADIODIFFUSION VISANT L'EXPLOITATION D'UNE ENTREPRISE DE
PROGRAMMATION DE RADIO POUR DESSERVIR WINNIPEG (MANITOBA)".
BEFORE / DEVANT:
Barbara
Cram Regional
Commissioner for Manitoba and Saskatchewan /
Conseillère
régionale pour le Manitoba et le Saskatchewan
Ronald
Williams Commissioner
/ Conseiller
Andrew
Cardozo Commissioner
/ Conseiller
ALSO
PRESENT / AUSSI PRÉSENTS:
Joe
Aguiar Hearing
Manager / Gérant de
l'audience
Gary
Krushen Secretary
/ secrétaire
Peter
McCallum Legal
Counsel /
conseiller
juridique
HELD
AT: TENUE
À:
Winnipeg
Convention Centre Winnipeg
Convention Centre
PanAm
Room Salle
PanAm
375
York Avenue 375,
avenue York
Winnipeg,
Manitoba Winnipeg
(Manitoba)
4 February, 2002 le
4 février 2002
Volume 1
TABLE OF CONTENTS / TABLE DES MATIÈRES
PARA
NO.
PHASE
I
APPLICATION
BY / APPLICATION PAR
by Rogers Broadcasting Limited 35
par Rogers Broadcasting Limited
by Corus Radio Company / par Corus Radio Company 291
Winnipeg,
Manitoba /
Winnipeg,
Manitoba
--- Upon commencing on Monday, February 4, 2002 at
0900 / L'audience débute le lundi 4 février 2002 à 0900
1
THE
CHAIRPERSON: Good morning, ladies and
gentlemen. Welcome to this hearing,
during which we will review applications for new FM radio services and for a
religious television service to serve the Winnipeg area.
2
My name is
Barbara Cram. I am the Regional Commissioner
for Manitoba and Saskatchewan. It is a
pleasure to be here today. The
Commission does not often have the pleasure of coming to Winnipeg to hold a
hearing. However, you must know that
our CRTC representatives working in our Winnipeg office make every effort to be
available to you and to respond to your concerns. I know this because, as the Regional Commissioner, I work, not
only at Regina, but also at the Winnipeg office as well.
3
With me on this
panel are my colleagues and fellow commissioners: Ronald Williams, Regional Commissioner for Alberta and the
Northwest Territories; and Commissioner Andrew Cardozo.
4
The CRTC team
assisting us during this hearing consists of Joe Aguiar, Hearing Manager; Steve
Parker; Suzanne Saso; Diane Maisonneuve; Judy Henry, who is in the examination
room; Peter McCallum; Legal Counsel; and Gary Krushen, Director of the Winnipeg
Regional Office and Hearing Secretary.
If you have any questions about the hearing, please feel free to refer
them to Mr. Krushen.
5
In order to
evaluate the FM applications received, the Commission will examine a number of
different factors such as the contribution the proposed service will make in
achieving the objectives established in the Broadcasting Act, the
competitive state of the market, the quality of the applications received and
their implications with respect to the diversity of editorial voices and the
possible impact of a new entrant or entrants into the market.
6
The Commission
will also look at the proposed services' expected audience, an analysis of the
markets involved, the potential advertising revenues, the evidence regarding
the availability of financial resources and the means by which the applicant
will promote the development of Canadian talent.
7
On July 11,
2001, the Commission issued a call for applications for a broadcasting service
to carry on a radio programming undertaking to serve Winnipeg. In response to this call, the Commission
received seven applications. This
hearing will examine these seven proposals.
8
First, we will
hear three competing applications for the use of the 99.1 MHz frequency.
9
Rogers
Broadcasting proposes to convert its station CKY from the AM band to the FM
band and to offer a Classic Hits service.
10
The second
application we will hear is from Corus Radio.
The station's musical format will be Oldies-Soft Adult Contemporary.
11
The third
application was submitted by Global Communications. Global is not a stranger to Winnipeg or to the Canadian
Broadcasting scene; however, this represents the company's first radio
application in Canada. Global would
offer a specialized Smooth Jazz service.
12
Next, we will
hear representations and presentations from four applicants who wish to obtain
FM radio licences for various frequencies.
13
We will start
with N.I.B. 95.5 Cable FM. N.I.B.
proposes to operate a radio station offering a Pop, Rock, Dance, Jazz and Blues
music service. In a subsequent Notice
of Public Hearing and at the applicant's request, the frequency has been
changed from 106.3 to 107.9 MHz.
14
We will then
hear from CKVN Radiolink System, who has applied for an FM radio licence on the
100.7 frequency. CKVN would offer a
specialized Easy Listening music format radio station. For your information, the Commission has accepted
additional letters of support for CKVN Radiolink to be added to their
application.
15
Next, HIS
Broadcasting will present its application to operate a specialized Christian
music service on the 107.1 frequency.
16
Finally, we
will hear the representations from Red River College Radio, who wish to obtain
a licence for an instructional campus FM radio station. At the applicant's request, the frequency
requested has been changed from 90.5 to 92.9 MHz, and the Public Notice has
been amended accordingly.
17
This hearing
will conclude with a presentation by Trinity Television. Trinity has applied for a licence for a new
religious over-the-air television station in the Winnipeg market. Since mid-September of last year, the
applicant has been operating a similar station in the Fraser Valley.
18
Trinity is well
known in the field of religious programming.
The proposed station would offer mainly Christian programming with 18
hours per week devoted to programs designed to achieve a balance in the
expression of differing points of view in religion. Canadian programming would total at least 80 hours per week.
19
This hearing
should last four days, beginning at 8:30 a.m. as of tomorrow and ending between
5:00 and 6:00 each day. Generally
speaking, we will sit each morning until approximately 12:30 and recommence at
approximately 2:00 p.m. and we will take one mid-morning and one mid-afternoon
break. I will advise you of any changes
in the schedule.
20
Generally, we
expect to hear all of the radio applications on Monday and Tuesday. This is called Phase I. Then the parties will intervene against each
other. Phase III is when the public provide their representations about the
applications and this will take place on Wednesday morning. Then there will be the final arguments of
the applicants. On Wednesday afternoon
and Thursday we will hear Trinity's application, public interventions on this
application and the final argument of Trinity.
21
When you are in
the hearing room, we ask that you turn off your cellular phones and pagers
because they may distract the participants and Commission members. We are counting on your cooperation in this
matter for the length of the hearing.
22
Before we
begin, I will ask the Hearing Secretary, Mr Krushen to explain the procedures
we will be following. Mr. Krushen?
23
THE
SECRETARY: Thank you Madam Chair. The radio applications being considered at
this hearing will be heard in four phases.
24
Phase I is a
presentation by the applicant to the Commission. Twenty minutes maximum is allowed for this presentation. Questions from the Commission will follow
each applicant's presentation.
25
In Phase II,
the applicants reappear in the same order as they presented their application
to intervene against competing applicants.
Ten minutes maximum is allocated for each intervention. Questions from the Commission may follow
each intervention.
26
In Phase III,
other appearing interveners make their presentations to the Commission. Ten minutes maximum is allowed for each of
these presentations. Again, there may
be questions from the Commission.
27
Phase IV
provides an opportunity for each applicant to make comments or rebut the
interventions that have been filed with respect to their application. Applicants appear in reverse order to which
they did in Phase I. Again, ten minutes
maximum are allowed and questions from the panel may follow.
28
Finally, the
application by Trinity Television will be heard in three phases, with the
second phase I've just described for competitive applications being eliminated.
29
For your
general information, files associated with items at this hearing are available
for viewing in the Assiniboine room, which is across the hall and to the right
of the exit from this room.
30
Judy Henry from
the CRTC's Winnipeg office will be staffing that room and she will be pleased
to assist you, but please be aware that while an application is being heard the
public files associated with it will be in this room and not available for
viewing.
31
If you wish to
have messages taken, we would be happy to post them outside the public
examination room. The phone number of
our public exam room is 984-0247. That
number is also in the agenda.
32
There is a
verbatim transcript of this hearing being taken by a court reporter who is
located at the table just to my left.
If you have any questions about how to obtain all or parts of this
transcript, please approach the court reporter during the break for
information.
33
When you are
ready to present to the Commission, be sure to hit the button so that the light
comes on on your microphone.
34
Now, with your
leave Madam Chair, I will call the first applicant. First application is by Rogers Broadcasting Limited for a
broadcasting licence to carry on English language FM radio programming
undertaking at Winnipeg on the frequency 99.1 MHz with an effective radiated
power of 100,000 watts. Please proceed
when you are ready.
35
MR. MILES: Good morning, Madam Chair. Red light.
Good morning, Madam Chair, members of the Commission. My pleasure to be here. I'm Gary Miles, Executive Vice-President,
Radio Operations, Rogers Broadcasting.
With me today, to my left, Sandra Stasiuk, Vice-President, Finance; and
Sandy Sanderson, Executive Vice-President, National Programming Director. To my right, Ron Kizney, Vice-President and
General Manager, CKY and CITI-FM; Steve Edwards, Vice-President, Corporate
Engineering and Technology. At the next
table, starting from my left, Ford Gardner, Program Director, CKY/CITI-FM; Rael
Merson, President, Rogers Broadcasting; Alain Strati, Director, Regulatory
Affairs; and George Buzunis, Chief Engineer, CKY/CITI-FM.
36
We are pleased
to present our application to convert CKY from an AM radio station on AM
frequency 580 KHz to an FM radio station, with a Rock format on FM frequency
99.1 MHz.
37
As the
Commission knows, this is not an application for a new radio service. It is a conversion application. We believe that our application is
consistent with the Commission's established policy on AM to FM conversions and
would result in the best and most effective use of FM frequency 99.1 in this
market.
38
FM frequency
99.1 will place the heritage radio service of CKY on an equal, competitive
footing with other music formatted radio stations in Winnipeg. Local listeners will benefit from an
increased choice and diversity of high-quality FM radio services. With the coverage offered by this frequency,
CKY will continue to be available throughout Winnipeg and the surrounding
area.
39
Since we are
proposing to convert an existing AM radio station to an FM radio station, the
approval of our application will have no material economic impact on other
local radio stations. Our research
shows there are a number of other FM channels available for use in
Winnipeg. As such, the approval of our
application would not prevent the Commission from licensing additional FM
services in this market.
40
CKY is a
heritage radio programming service that first went to air in 1923. Since then, CKY has played a leading role in
the development of private radio in Winnipeg, offering local listeners
high-quality surveillance and music programming. CKY's heritage and tradition has always been steeped in Rock
Music. CKY has been recognized as a Top
40 rock and roll giant in the Canadian broadcasting system.
41
In the 1960s
and '70s, CKY was on the forefront of the development of Canadian rock music in
Western Canada. CKY helped to launch
the Guess Who, Winnipeg's best known contribution to the rock scene. In fact, the Guess Who's first hit, "Shaking
all Over," was recorded in the CKY production studio and first played on CKY
radio.
42
Today, CKY
continues to draw on its long established relationships with Western Canada
rock musicians. Winnipeg's own Burton
Cummings and Randy Bachman are not only fans of the station, but are often
surprise guests.
43
The station has
offered many programs that feature well known local artists, such as "KY 58
Clubhouse," hosted by the late Gary MacLean of MacLean and MacLean.
44
In 2000, CKY
launched the Guess Who World Tour by kicking off the first show at a local
club, offering Winnipeggers the opportunity to see the band for free. Last year the station hosted an event that
raised $100,000 to support a trust fund for Gary MacLean's family after he was
diagnosed with inoperable throat cancer.
45
Notwithstanding
CKY's long history and deep connection with the local community, it faces
significant challenges as an AM music station.
46
Winnipeg is
like many other radio markets in Canada; music listeners now expect the higher
technical quality of an FM signal. In
addition, many listeners are simply not in the habit of tuning to the AM band
for music.
47
CKY had pre-tax
losses of almost $370,000 over the period 1995 to 2000. We project that, as an AM music station, CKY
will continue to lose money on a cumulative basis over the next seven
years. The financial challenges facing
CKY will become even more severe if the Commission chooses to license
additional FM radio services as part of this proceeding or some future proceeding.
48
Non-music
formats are still viable on the AM band.
But the key competitive non-music niches in the AM markets in Winnipeg
are very ably occupied at the present time.
The news/talk format offered by CJOB is the overall market leader and
has been a great radio station. It
commands an 18.5 share of the 12-plus listening. On its own, CJOB now accounts for 74 percent of all AM listening
in Winnipeg. The other AM station in
the market, CFST, recently replaced its music format with an all-sports format.
49
Ron Kizney.
50
MR.
KIZNEY: This application is designed to
respond to market trends in a way that will best serve local listeners and
contribute to the achievement of the objectives of the Commission's commercial
radio policy.
51
The conversion of
CKY to an FM radio station with a Rock format will directly benefit local
listeners. CKY-FM will add to the
choice and diversity of Rock formats for all listeners on the FM band. Listeners will also benefit from the
enhanced audio quality of an FM signal.
52
Conversion will
allow us to address the financial challenges facing CKY. If this application is approved, we project
that CKY will be able to attract the audiences and revenues necessary to
support the continued provision of a high quality, music-formatted, local radio
service.
53
In addition,
the conversion of CKY to an FM station will allow us to increase our direct
financial commitment to Canadian talent development.
54
As part of the
CAB's initiative, the Canadian Talent Development Plan, CKY has already
designated all of its $8,000 per year commitment to go directly to FACTOR. If this application is approved, CKY will
increase its annual contribution to FACTOR by 50 percent. This represents a significant commitment
over and above the accepted level of contribution by an FM station in a market
the size of Winnipeg.
55
We will of
course continue to rely on the advice and assistance of the Rogers Broadcasting
Local Advisory Board in Winnipeg. The
members of the Advisory Board include prominent local citizens with a clear
commitment to the community.
56
Dorothy Dobbie
is a successful local businessperson with over 20 years of experience in the
field of printing and publishing. She
is a former Member of Parliament, during which time she co-chaired the Joint
Committee on the Renewal of Canada -- the Dobbie-Beaudoin Committee -- and
served as Parliamentary Secretary to various Ministers. She has played leadership roles in many
important business, community and charitable associations.
57
Bruce Jack is a
partner in the Winnipeg office of Deloitte and Touche. He combines an active career in management
consulting with an extensive commitment to the local community. Mr. Jack is
currently Treasurer and board member of the Manitoba Children's Museum and has
served as a member of the board of the Canadian Cancer Society, Junior
Achievement of Manitoba and the Prairie Theatre Exchange.
58
Rita Barthwick
is a well known local businessperson with an extensive record of achievement
and service to the community. She has
served as President of the Manitoba Chamber of Commerce, Chairperson of the
Manitoba Canada Day committee, and as a member of the special advisory
committees established by the Manitoba Minister of Education. She is currently director of ACTA Manitoba and
serves on a number of boards and advisory councils, including the Canadian
Standards Association Advisory Council and the Manitoba Historical
Society. Steve.
59
MR.
EDWARDS: Unlike the situation in many
other larger markets in Canada, there is no shortage of available FM channels
in Winnipeg. As you can see from the
chart behind me, there are at least 11 FM channels that could be used to serve
radio listeners in Winnipeg. There are
five channels that could be used at high power and six channels that could be
used at lower powers.
60
We are
proposing that CKY-FM use Channel 256C -- 99.1 Mhz -- with an effective
radiated power of 100 kW. That channel
will best ensure that the CKY programming service continues to be available
throughout Winnipeg and the surrounding areas.
61
In preparing
our application, we were certainly cognizant of the potential loss of audience
for CKY-AM. We propose to maximize the
coverage of the new station by using the best available high power frequency
and to construct a tall transmission tower.
62
The approval of
our application would be consistent with the Commission's established policy on
AM to FM conversions. Since there are a
number of other FM channels available, our use of FM frequency 99.1 would not create
technical barriers to the licensing of additional FM stations in Winnipeg.
63
The Commission
has generally been prepared to approve conversion applications when there is
more than one FM channel available in the market. Gary.
64
MR. MILES: Since we are proposing the conversion of an
existing radio station, our application does not raise significant policy
issues with respect to the competitive structure of the local radio market.
65
First, the
conversion of CKY will not have a material economic impact on other local radio
stations. As is set out in the
financial projections filed with our application, CKY requires only a very
modest increase in advertising revenues, well below the rate of market growth,
to allow it to offer an attractive, economically viable FM radio service.
66
Second, as a
conversion, this application will have no impact on the level of competition in
this market. We currently own two radio
stations and will continue to do so if this application is approved. As such, there will be no reduction in the
level of competition.
67
Third, by
placing CKY on an equal competitive footing with other music-formatted radio
stations, this application will help to preserve and protect a long established
and distinctive presence in the market.
68
Fourth, since
there are a number of FM channels available, the approval of this application
would not prevent the Commission from further increasing choice and diversity
for local listeners by licensing additional FM services as part of this
proceeding, or some future proceeding.
69
In conclusion,
Madam Chair, members of the Commission, we believe that the approval of this
application to convert CKY to an FM radio station would best serve local
listeners. This application is
consistent with the Commission's established policy on AM to FM conversions and
would directly contribute to the achievement of the objectives of the
commercial radio policy.
70
This proposed
conversion:
71
(i) will
increase choice and diversity for local listeners in the Winnipeg market;
72
(ii) is the
best and most effective use of the FM frequency 99.1, since it will ensure the
continued availability of the CKY heritage radio service throughout Winnipeg
and the surrounding area;
73
(iii) will not
create technical barriers to the licensing of additional FM radio stations,
since there are a number of channels available in the Winnipeg market;
74
(iv) will have
no material economic impact on the other local radio stations;
75
(v) will have
no impact on the level of competition in the market; and
76
(vi) will
result in increased support for Canadian talent development.
77
For all these
reasons, we believe that the approval of our application to convert CKY to an
FM radio station would be in the public interest. We look forward to questions that you may have for us. Thank you.
78
THE
CHAIRPERSON: Thank you Mr. Miles,
gentlemen, and Ms. Stasiuk. I will be
starting with the questions.
79
I wanted to
start with one question, which of course had not occurred to me before. The monies that you presently send to FACTOR
and the ones that you are proposing to continue increasing, is that in any way
designated to Winnipeg or Manitoba artists?
80
MR. MILES: We have asked FACTOR to designated it
towards not necessarily one of the Winnipeg or Manitoba artists, and frankly,
we had not thought of it in this particular case. We'd love to do it. We've
done it in other applications. In one
of our conversions in British Columbia, we dedicated it to B.C. musicians and
things like that.
81
I think one of
the things that FACTOR says is that they like to have a little wider catchment
area, so it may well be for the Prairies. But yes, we'll ensure that that
happens. We're big supporters of local
talent here and we're quite proud of our involvement with the Guess Who, and we
would do that, yes.
82
THE
CHAIRPERSON: If I have it correct, CKY
now has an Oldies format and you're asking that CKY, should you obtain this
frequency, that CKY would be simulcast on the FM frequency for three months; is
that correct?
83
MR. MILES: Yes.
84
THE
CHAIRPERSON: Doesn't it normally happen
the converse? That the new FM is
actually simulcast on the AM?
85
MR. MILES: That's correct.
86
THE
CHAIRPERSON: And you're asking for the
opposite?
87
MR. MILES: We meant to say that we wanted to simulcast
the FM on the AM frequency. So in other
words, we would not be broadcasting Oldies on FM.
88
THE
CHAIRPERSON: Oldies on FM. You know our rules now, Mr. Miles.
89
MR. MILES: Yes, I do know that.
90
THE
CHAIRPERSON: So in fact, it's the new
FM station that you would be simulcasting on the AM.
91
MR. MILES: And in fact, that's what we've done in all
of our conversions.
92
THE
CHAIRPERSON: And right now, you've got
CITI at Classic Rock, if I've got it, and CKY, you've actually called it Rock
in your presentation, I believe, but it's going to be Classic Hits; is that it?
93
MR. MILES: I think that there's two things to take into
account on this one and it's a great question and I'm going to ask Sandy to
sort of go a little forward on this with regards to the formats. As we're all aware, the formats are more and
more difficult to sort of regulate because with more and more entries, you have
to figure out where within the spectrum that it goes. CKY is a heritage Rock radio station, and in fact, the Oldies
that we're currently playing on CKY were considered to be pretty evil songs
back in those days. They were the rock
and roll music of that particular time.
94
So the heritage
of CKY Radio has been a Rock format, whether it's the Hits, Classic Hits
format. There's a number of new formats
of the rock genre that have been introduced; alternative would be one of
them. There's a new format out in the
States called Triple A. It's sort of
'80s and '90s, all of the rock genre.
95
So what we've
taken a look at more than anything else is to figure out where within the
broader spectrum of Rock or A/C music, male or female music, that this station
would fit, relying of course on our continued research into the marketplace and
where the Commission ends up licensing other services. We do not want to duplicate radio
services. We want to add to the
diversity with the market services that are available, and sometimes that can't
happen until all of the formats are shaken out and the rest of the licenses are
granted.
96
But Sandy has some
comments with regard to the male/female split within the marketplace.
97
MR.
SANDERSON: Thank you Gary. The market ‑‑ at the
moment, there are six FM stations, playing music in Winnipeg. Four of those are targeted primarily to
women and just two are targeted primarily to men. We have a Top 40, an A/C, a Hot A/C and Country, which garner
more females than males, and then a Classic Rock and an AOR playing rock. Two of the three applications before you are
also for female-based formats.
98
Winnipeg is a
rock town. I remember a gentleman who
does research for us told me a few years ago that after doing a perceptual
study, he'd never seen such a penchant for rock in any other market, certainly
Canada, than Winnipeg. I think Ford
Gardner just did some music research last week, I believe, and turned up a
couple of interesting examples of that.
99
MR.
GARDNER: The scores in Winnipeg related
to rock compared to all the other cities that we did research in across Canada
were, in fact, in some cases, double, double Ottawa for sure. It's a format in this town that scores far
higher than any other market we've done the same research in.
100
MR.
SANDERSON: So given that and the fact
that there's an imbalance as far as male/female is concerned ‑‑
but overriding all of that is the heritage of CKY as a rock and roll station
that started back when you were only allowed to see half of Elvis.
101
For those
reasons, we feel our place is on the rock side as a new station.
102
THE
CHAIRPERSON: I mean, I'm not Mr. Parker
here; I know some music. If CITI is
known as Classic Rock, what is the new CKY going to be? Your application called it Classic
Hits. How do I distinguish between the
two?
103
MR.
SANDERSON: There is a distinction. It's not a huge distinction, but certainly
with one owner having two stations in the same area, we would make sure that
there was diversity. It makes no
economic sense or reasons of diversity to have both stations going after the
same audience.
104
Classic Rock is
more of an album rock, non-hit type of music.
It is songs that are several tracks deep on albums that everyone in the
audience owns and became popular.
Classic Hits is certified, "Billboard" kind of hits from the different
eras, both of which are targeted toward men.
105
THE CHAIRPERSON: So then, the difference would then be
that ‑‑ can I do it in terms of a percentage of hits from the
'70s or '80s or '90s to distinguish between the two or just in the tone? It's more laid back, that CITI is more laid
back or --
106
MR.
SANDERSON: Madam Chair, it would be
both, in both those ways. But certainly
the exact allocation of '60s, '70s, '80s, '90s will have to be decided. I mean, the market is in flux and just by
virtue of the fact that there's a hearing on, there are changes going on in the
marketplace, when approvals are announced, there will be blocking programming
going on. So the exact allocation of
the eras will have to wait until we know what the market looks like.
107
THE
CHAIRPERSON: All right. I'm kind of being found in a conundrum that
sounds to me like you're going to go where there is a hole and you don't know
where the hole is.
108
MR.
SANDERSON: The hole could be changing
right now. And if there are low
approvals granted there will be several holes, and if several are granted there
will be fewer holes.
109
THE
CHAIRPERSON: But right now, you are
thinking about Classic Hits from the '70s, '80s and '90s and that is
male-oriented and more hit-related than CITI.
110
MR.
SANDERSON: Yes.
111
THE
CHAIRPERSON: It seems to me ‑‑
and here's where I want to talk diversity.
It seems to me that what I'm seeing is that you're sort of splitting
your own classic rock into hits and non-hits.
Is this how I'm hearing it?
112
MR.
SANDERSON: Well, what we want to do is
to build on the heritage of CKY ‑‑ I mean, it's got so many
years of heritage ‑‑ and celebrate that and put it in
stereo. George will go crazy because it
is in stereo now, but I mean on the FM band.
So given that we feel it's important for a music station to be on the FM
band not the AM band ‑‑ it's just the perceptions of the
audience, it's the way it's going ‑‑ and given the fact that
it's impossible to duplicate the format on FM, we'd like to try and draw those
people who love CKY because it was a rock and roll giant, over to the FM band.
113
THE
CHAIRPERSON: So what you're really
trying to do is keep CKY the way it is, but because our regulations are
different on the FM band, this is what
you have to do?
114
MR.
SANDERSON: Yes.
115
THE
CHAIRPERSON: So again, I want to think
about this issue of diversity because on the one hand, you say, Mr. Miles at
page 9 in the penultimate paragraph of your presentation today, "This
application will help to preserve and protect a long established and
distinctive presence in the market."
And then you, at page 10, talk about diversity. What will this add to the Winnipeg market?
116
MR. MILES: It will add two things. First of all, it will provide a service of a
radio station that has a long heritage of providing a rock format, in which,
the cume to the station has been declining over the last seven years. It's no different than any other AM-based
radio station.
117
So all of a
sudden this availability of a service to Winnipeg and its surrounding community
continues to be less and less used by the public because they are not
comfortable going to the AM band for music.
So that's the first one.
118
The second one
is that we want to build and continue to explore on the CKY heritage, which has
always been a rock and roll radio station of some form or another, and as we
sort of see our audience build and are able to do more research into it, we'll
be able to more finely hone what particular brand of rock that is.
119
If we get down
to it, there's either radio stations going towards a female listener or radio
stations going towards a male listener.
When we took a look at the marketplace, as Sandy has indicated, as well
as the applications before, we saw that there was an overbalance of stations
aimed at females ‑‑ and good for them, and that's the way it should
be. So we want to continue to preserve
where our expertise in this marketplace, not only on CITI but also on the whole
heritage of CKY, of providing that service back into the mainstream listeners,
and therefore establishing and making sure that CKY remains part of the radio
spectrum in Winnipeg.
120
THE
CHAIRPERSON: So then you say you won't
have very much impact on other people, on other competitors in the market. Essentially though, would some of the impact
come that you would be cannibalizing your own stations, cannibalizing CITI's
listeners?
121
MR. MILES:
I don't think there's any question about that. I think that as we continue to add more and more formats in the
marketplace, that always is part of what happens. We've certainly done it within our own radio stations. Victoria would be a classic example of where
we had an A/C radio station and we put on a Top 40 radio station and
immediately took all the young end off our station.
122
But I think
that's part of what happens, you know.
We asked for multiple license ownership and we got it. Multiple license ownership, I think, has
provided a great deal of diversity. And
this is not an editorial comment, but we wouldn't have had Smooth Jazz formats,
we wouldn't have had the ability to separate the kind of wider-based rock
formats or female-based formats as we have now. And I think that's good because it's no longer just a matter of a
certain demo; it is more a lifestyle of listening.
123
And that's
really what we're talking about. We're
talking about lifestyle of the heritage CKY AM radio listener and translating
that into something that will appeal to them, in the Rock idiom on an FM band.
124
THE
CHAIRPERSON: So on the one hand you say
you'll have very little impact on existing competitors, and then on the other
hand, Rogers, like anybody else, is here to make money and to be
successful. The two don't necessarily
fit in my mind. Clearly there will be
some impact on other competitors in the, especially, if I can call it,
male-based format competitors in the market.
And Mr. Sanderson, who do you think that would be?
125
MR.
SANDERSON: Well, it will have to be
Corus. It will have to be the power
station here, which is the other male station.
126
THE
CHAIRPERSON: At the end of the day,
should we license CKYN-FM, would CITI's format eventually change?
127
MR. MILES: It may; I don't know. Once again, we continue to do research into
the marketplace and we continue to figure out what audience is not being served
and stay true to the roots of the radio station.
128
THE
CHAIRPERSON: Local programming. You've already said that you would accept a
COL for the non-solicitation or acceptance of local advertising if you have
less than one-third local programming.
What are your plans for local programming?
129
MR. MILES: No, we will program this as a full-service
radio station.
130
THE
CHAIRPERSON: So what are your plans
then for spoken word, local news, information?
131
MR. MILES: There'll be local news on the radio
station. What we really talk about now
though is more surveillance. So it is a
blending really of what is important to that audience. In this particular case, male audiences may
well be more interested in sporting news as compared with international
news. So our surveillance material
always represents that particular aspect.
We provide more of a softer kind of news, if you would, on A/C radio
stations; more of a sports kind of news on male-based stations; but still
always, the news of the day, the current market conditions, traffic. Certainly weather in Winnipeg is always a
big tune-in factor.
132
THE
CHAIRPERSON: So can you tell me how
much you anticipate when this programming will happen?
133
MR. MILES: We'll schedule it mostly throughout our
drive period, so the morning drive and the afternoon drive, limited in the
afternoon drive.
134
What we've
found is that more and more people, of course, are finding other ways of
getting their news ‑‑ as you and I used to recall, news on
radio stations ‑‑ and so it's now more important to make sure
that the topical talk patterns of the personalities reflect what the audience
wants to expect in terms of surveillance, or as we would call it, news,
weather, traffic, et cetera.
135
THE
CHAIRPERSON: So Mr. Miles, how many
minutes per hour, what hours?
136
MR. MILES: I would suggest that we would certainly have
newscasts in the morning drive at six, seven, eight, nine, and certainly in the
afternoon drive of four, five and six as we do with most of our other radio
stations.
137
THE
CHAIRPERSON: How many minutes?
138
MR. MILES: Duration?
It would probably go anywhere from two to three minutes depending on
what we put in the surveillance package.
139
THE
CHAIRPERSON: If you were given
approval, how long would it take you to implement this new station?
140
MR. MILES: I think I would ask, because I'm not allowed
to answer technical questions, Steve Edwards and George Buzunis, and then I
think it would be an appropriate time also for Steve, unless you have the
question coming up, to explain sort of the frequency charts that we have.
141
THE
CHAIRPERSON: Oh no, I have a question
coming up.
142
MR. MILES: Okay, good.
Terrific. Okay then, the
conversion times, Steve?
143
MR.
EDWARDS: It would take from six to
twelve months after receipt of the licence depending on what time of year it
was, but it wouldn't be out of the normal routine.
144
THE
CHAIRPERSON: You don't need to add
anything, Mr. Buzunis?
145
MR. MILES: Madam Chair, part of the reason for that
rather longer period of time, of course, is because we are in the process of trying
to construct a tall tower with common people, common ownership or some
structure along that line. It's not our
intention to be in the tower business, I assure you.
146
But because there
is an opportunity here, and as you know, local communities are more and more
concerned about towers and things like that, so if we can all get together and
do that, and that provides for maximum use of this frequency for us.
147
THE
CHAIRPERSON: I wanted to talk about one
thing that -- normally I don't go heavily into numbers. In your approval scenario, in your
projections ‑‑ I'm not sure if you have looked at it
extensively ‑‑ there is a huge change in the PBIT in the
second year that you're proposing, and I'm wondering if the amount you've
stated for sales and promo in year two is, in fact, incorrect because there is
a huge bump there. Maybe Mr. Strati, do
you know?
148
MR. MILES: Sandra can certainly speak to that, but what
we usually do is provide "boompf" in order to capture those listeners who have
gone away from CKY and to launch the station and make sure that it has a
presence in the marketplace. Sandra?
149
MS.
STASIUK: Yes, we knew that that number
had gone up and it was a significant change in year two due to the sales and
marketing efforts that we anticipated.
150
THE
CHAIRPERSON: So it is this "boompf" you
were talking about, Mr. Miles?
151
MS.
STASIUK: Yes.
152
THE
CHAIRPERSON: Okay. You then talked, in your supplementary
brief, about a time tested format, appeal to the CKY audience and potential to
attract. This is this research that
you've been talking about before, Mr. Gardner, about the rock format and its
appeal. How often do you do these
studies and how are they conducted?
153
MR. GARDNER: Annually, at the moment.
154
THE
CHAIRPERSON: And what are they? Like a phone?
155
MR.
GARDNER: It's an auditorium test of
music and a focus group.
156
THE
CHAIRPERSON: Okay, so you pick up ten
people, kind of, once a year and sort of sit down with them and say, "What do
you really like?" Is that it?
157
MR. GARDNER:
No, I believe the number was 89.
158
THE
CHAIRPERSON: In Winnipeg?
159
MR.
GARDNER: Yes.
160
MR. MILES: In addition to that, Madam Chair, in our
major markets, we go in and do an annual perceptual, which is respondents of
about 850 to 1,000 and we've got past information from that from Winnipeg. And if we are allowed to proceed with this
application to convert, we'll go back into that in this particular market to
make sure that we find out as much as possible and tie it in with our other
markets. So we have an extensive
program in which we do market research into all of our major markets.
161
THE
CHAIRPERSON: So every year then, what
you call this "perceptual"?
162
MR. MILES: Yes, that's correct.
163
THE
CHAIRPERSON: And is it a phone survey
kind of thing?
164
MR. MILES: Yes.
In fact, with ‑‑ Sandy, what's the PBM number into this
marketplace? About ‑‑
165
MR.
SANDERSON: Oh, the number of
people?
166
MR. MILES: Yes.
167
MR.
SANDERSON: Twelve hundred.
168
THE
CHAIRPERSON: You talk about this being
your hope of halting the declining share for CKY, and of course, your denial
scenario shows revenue going down. But
Winnipeg is sort of unique, isn't it?
Or the Prairies are unique in terms of AM generally does better than
anywhere else?
169
MR. MILES: Yes.
I've got a smile on my face because it's not unique enough. I think the great news about operating AM
radio stations on the Prairies, and we may get into this from a technical point
of view, is that it's so difficult to actually duplicate the coverage with an
FM signal. You can't build towers high
enough and it doesn't go far enough.
170
Unfortunately,
it hasn't stopped the decline and with a moment of sadness in my eyes, the
demise of CKCK in Regina which, at one time, owned all of the Prairies, all of
Saskatchewan, shared it with CFQC, I think the station was, in Saskatoon, and
still, didn't stop that decline on that basis.
171
We've had some
success, we believe, in keeping AM stations going. 680 News would be a great example of that, a station, by the way,
that we changed to an all news format before it became unprofitable. We followed it up by News 1130, in
Vancouver, and we haven't been as successful with News 1130 in Vancouver. Frankly, the market of 1.5 million is sort
of on the cusp of what we would consider to be a good market for an all news
radio program.
172
Having said
that, we've also kept an AM service going in Kitchener with a news/information
programming, similar to what CJOB has done here. I was in this market for 10 years, could never beat CJOB and it's
a great radio station. You know, they
have got a great niche and they do a great programming job on it.
173
In Calgary we
kept our AM radio station. We converted
it to Team 960, which is an all sports format.
So where we can, we actually do believe in the AM product and we think
there are great markets for it. But
here, the two niches have been taken. A
great radio station with a lot of heritage in CJOB and the CHUM station has
already converted to that Team, all sports station. So as much as we would like to continue to do that, yes, it
can.
174
Ford will tell
you that our cume has gone down continually on the AM station and CKY, no
different than we've experienced in Ottawa, that we've experienced in Calgary
on CFFR. And the reasons we made some
of those conversions in Winnipeg, or in Toronto and Vancouver, and the same
reason we converted in Lethbridge ‑‑ we had a country music
radio station on the AM band in Lethbridge.
I mean, how good does that get?
Except that there was another frequency, an FM frequency came on, and
country music was put on against us and it just disappears. People want to listen to music on FM. I'd like to fight it, but I can't.
175
THE
CHAIRPERSON: But relative to everywhere
else, Winnipeg AMs did fairly good in the BBMs last fall?
176
MR. MILES: Last fall they did, yes. I'd like to take some credit on behalf of
Ron Kizney and Ford Gardner for that.
And I mean it very sincerely.
The Guess Who relaunch; there was a world tour; it started off with a
big rally here in Winnipeg and they went on to it. I think Country Music Week, the Guess Who is going to be honoured
at that coming up in the next month.
And so we capitalized on that here in Winnipeg on CKY. And we got a bit of a blip. But that's in share. The terms of it, the cume of this radio
station has continually declined, declined, declined. And we don't see it going up.
I'd like to say that my brilliant programmers could keep doing it but
even they may not be able to.
177
THE
CHAIRPERSON: So are you saying then
that last fall's BBMs were a blip for CKY?
178
MR. MILES: I'd never tell my president that. I'd tell him it was great programming. But it certainly, when we take a look and
compare it against -- and we run Oldies in other markets -- there was no blip
in Calgary; there was no blip in Ottawa.
And we run Oldies in those two radio stations and we have great
programmers there. So yes, I would say
it was the combination of the whole Guess Who format, the big emotional thing
leading up with Gary MacLean's unfortunate demise, and then the rallying and
things like that. You know, this was a
Winnipeg event.
179
THE
CHAIRPERSON: So as a result of that, of
the share in the fall, you haven't changed your projections for CKY at all?
180
MR. MILES: No, I'm afraid not.
181
THE
CHAIRPERSON: Since the filing of your
application, there have been some world events, shall we say, that have changed
the Conference Board projections for Winnipeg.
What do you believe is the impact on the Winnipeg market of the changed
projections of the Conference Board and, as they say, as a result of the tragic
events of September 11th?
182
MR. MILES: Thank you for that. I have no degree in economics, but I do know
one thing: that we foresaw the decline
that started to happen all the way across Canada around about March or April,
as did my other fellow broadcasters who operate in the same markets. We talk about this. So the events of 9/11 certainly delayed
anything happening, but it was not the main factor in what was happening, which
is that radio revenue has declined along with all other advertising revenue.
183
I operated two
radio stations in Winnipeg as the manager for about ten years and here was the
good news and the bad news about Winnipeg.
The good news is that the markets usually grew about three percent. And that was the bad news. It never grew at seven and it didn't go down
to about one or two.
184
In the last
year, the TRAM report actually shows the radio revenues in Winnipeg going at
about nine percent. But to be quite
frank about it, the Winnipeg radio market has been under-evaluated for a long
period of time. This is a tough,
competitive radio market. You start
thinking about nine radio stations in a market of about 500,000 people. I think Edmonton has about the same number
with close to eight or nine hundred thousand, and I think there's one or two
more with the new licences granted in Calgary, close to 900,000.
185
So this has
always been a tough slug, which is why, in our conversion material, we
purposely went underneath what the CRTC had established at a 4.4 long-term
growth average in order to meet our projections.
186
So we're
confident that, based on the material that we've give you, that we will be able
to make this thing a successfully economic, viable radio station in light of
the fact that I think the radio revenues are going to continue to decline, at
least for the next six months, if, frankly, not for the next year.
187
THE
CHAIRPERSON: So in terms of your plan
and projections, has that changed, or were they sufficiently conservative to
start off with that they haven't changed?
188
MR. MILES: They were sufficiently ambitious until I
said I'd been in the Winnipeg market and I don't think we should be that
ambitious because over the long haul, there is some problems in here with
regards to getting the radio revenue up.
I think that the operators we've got in the marketplace now are doing a
good job of that. You know, we've got
tough television competition. But
that's fine, that's what it's all about is competition. And I think that over the long haul our
projections will not change because we purposely went in lower than what the
market rate has been for the last number of years.
189
THE
CHAIRPERSON: So your plan hasn't
changed. Your projections haven't
changed.
190
MR. MILES: No.
They were modest to begin with and they will continue to be modest.
191
THE
CHAIRPERSON: And so now, and again, as
a result of economic conditions, do you think the market would support your
flip and another commercial station being added to the market?
192
MR. MILES: It's an interesting question. But to be quite frank about it, we never
opposed any other additional radio stations.
We're in this game to provide good radio service, to provide the best
programming that we possibly can. What
we want to do with our application is to balance out what we have with an AM
radio station that's declining that belongs in this market and convert it to an
FM radio station. So that's my primary
game plan. We put our economic
projections in underneath the marketplace growth. I don't know what the other applicants have suggested for their
particular growth, but we're comfortable with our numbers.
193
THE
CHAIRPERSON: So from, I guess I would
call it a competitive point of view, it doesn't matter to you whether or not we
license your flip and license another commercial station?
194
MR. MILES: No, it does not.
195
THE
CHAIRPERSON: And would it impact on
your business plan if we did that?
196
MR. MILES: It depends on what format that they went
into. Again, if it was another
male-based format that got licensed, it may and we would have to take another
look at what we were planning to do.
But we are accustomed to doing that.
There's been a number of markets where new FM radio stations have been
licensed recently -- Calgary, Ottawa, Vancouver -- and we're always making
adjustments as, I suspect, the other broadcasters are.
197
THE
CHAIRPERSON: So now we get into the
technical aspect. You know, others are
applying for the 99.1, and you said in your opening statement that yours is the
best use of the frequency. From a
technical perspective, why is yours the best use?
198
MR. MILES: Mr. Edwards.
199
MR.
EDWARDS: The key reason is because
we're proposing to use the most unencumbered, if you like, frequency at the
highest height that is practical to do in the Winnipeg market.
200
THE
CHAIRPERSON: And given the number of
frequencies ‑‑ and I'm looking at your FM frequency
availability list ‑‑ you have, I believe, Mr. Edwards,
five that could all be high power, FM frequencies?
201
MR.
EDWARDS: That's correct.
202
THE
CHAIRPERSON: And when you talk high
power, would they have the same coverage and the coverage you're proposing for
CKYN-FM?
203
MR.
EDWARDS: Very nearly. The differences ‑‑ there
are more nuances than anything else. If
I could describe it this way, the frequency that we applied for is the most
obvious one in a sense because it has been allotted to the marketplace by
Industry Canada for many years.
204
The others have
more qualifiers than they do limitations.
For example, channel 204, 88.7 Mhz, would have to be used at the CBC
site because that's where they use television channel 6. That would be a nuisance for us. It would limit our ability to duplicate CKY
because it's somebody else's tower. It
wouldn't be where we'd be operating our other station. You know, we'd be limited to what kind of
antenna we could put where. But that
site is shared by Global and CBC, for example, so it may have great relevance
to Global.
205
Another two
channels are drop-ins into the marketplace and they have slightly different
qualifiers. Channel 273 is third
adjacent to CKMM, and traditionally that would have been difficult. But in fact, tomorrow, Industry Canada is
chairing a government/industry meeting to study their proposals to change the
rules to recognize the performance of current receivers which would treat third
adjacent and fourth adjacent the same.
So the limitation there is that those two licences would have to be
located on the same tower. But again,
it could be used at full power.
206
Oh sorry, and
in that particular case, there is a slight directional requirement to the
southwest to protect an American station.
207
The third
channel, 284, is a similar situation except that it's third adjacent to CFQX,
which is located some distance north of Winnipeg. It's licensed to serve Selkirk.
And again, that would pose some difficulties for us because it would be
in a different location and we couldn't achieve the same coverage that we could
-- or at least the coverage in the same places that we could.
208
So we feel that
the channel that we've applied for could come closest to duplicating the coverage
of CKY, but it is a matter of degree.
It's not that there's a dramatic difference between those channels and
their usability.
209
THE
CHAIRPERSON: And when I'm looking at
that -- thank you Mr. Edwards -- when I'm looking at that, channel 210, that is
the one that CBC has now?
210
MR.
EDWARDS: No. I was trying to think of a way that I could highlight that one a
little differently. CBC is not
currently licensed to use that but it is their intention, I understand, have
been told, to apply for that very soon and that's on their (inaudible -- off
microphone) so to speak.
211
THE
CHAIRPERSON: On their long range
allocation?
212
MR.
EDWARDS: Exactly. They anticipate applying for that very soon
to be used from their site as well.
213
THE
CHAIRPERSON: And at channel 204, Mr.
Miles, you did say you're looking for a site to share with somebody, so CBC
would be just as good a dancing partner as anybody else?
214
MR.
EDWARDS: No, not at all. The limitation there is that the tower that
we're looking to build with other broadcasters would be something over 800 feet
tall, and we're in discussions right now with Master FM, which is a consortium
owned by Rogers, CHUM, Standard, CBC and CHIN.
They're interested in building that tower. With a new tower you could optimize the antennas for many of the
current FM stations in the Winnipeg area.
The CBC tower is well established, quite a long way out of town for good
FM performance, and doesn't have anywhere near the flexibility for location of
antennas that this site that we're talking about would. But it would work very well for broadcasters
that might be already using that tower.
215
THE
CHAIRPERSON: So would Rogers be willing
to accept another frequency if authorized to flip?
216
MR. MILES: Yes.
217
THE
CHAIRPERSON: And when I look at Mr.
Edwards' list, are there any of the high power ones that you would not accept?
218
MR.
EDWARDS: 204 would pose the greatest
difficulty for us because it would provide the most limitations. Equally, 284 would be very difficult
because, unless we could persuade the Commission and CFQX that they should move
the tower close to Winnipeg, it wouldn't provide very good coverage of the
Winnipeg market compared to the other two.
219
So if you were
to say which of the alternative three would work, I would say 273 would come
the closest.
220
THE
CHAIRPERSON: And given the number ‑‑
and I take it that you therefore think that 99.1 is the best, at least in
coverage for you, and clearly, Corus and Global would think pretty well the
same ‑‑ why is it in the public interest to give that
frequency to you?
221
MR. MILES: Again, it's a matter of coverage. We wanted to duplicate without extending, as
we have done in similar instances where we're converting an AM radio station to
an FM, and certainly one of the criteria we have always considered is to make
sure the pattern tries to come as close as it can to the pattern of the AM
radio station.
222
As we all know
in the Prairies, that's almost impossible to do, but the figures that we're
able to provide, I think that it shows somewhat of a ten percent decline in
terms of the audience and it's the closest, again by maximizing the highest
power.
223
THE
CHAIRPERSON: I wanted to talk about
that issue of same coverage because I take it that what you're really talking
about is the, if I can call it, engineering coverage in terms of that's what
you're really talking about, when they do the three and five kilometre
contours.
224
But we all know
that's not the reality. I was driving
here to Winnipeg from Regina after September 11 and I could hear CKY a heck of
a lot further than the coverage area of Winnipeg.
225
So we're really
only talking theoretical, aren't we, when you talk about a low potential loss
of customers?
226
MR. MILES: Well, theoretical only because we're able to
measure the number of listeners against the number of listeners that are in
there. Yes, absolutely the great thing
about the Prairies is that some days you can pick up CKY outside of Regina. I used to remember as a broadcaster in
Regina listening to CKY on the outskirts.
227
The other thing
is that also there's coverage up into the northern part, into the resort areas
and things like that. But I think the
same could be said with that kind of -- I don't know whether you'd call it
accidental coverage, because I don't mean it that way -- but there certainly is
the ability to have those statements picked up remotely, far more than any FM
radio station.
228
Again, having
said that, what I do know is that there are more and more communities which are
licensing radio stations on the FM band and providing local service to their
community.
229
And at the end
of the day, it is a local ‑‑ radio is local, local and local,
and the majority of people live within the environs of Winnipeg in
Manitoba. That's our core audience,
that's the radio station we're licensed to serve, and it will be sad that we
wouldn't be able to have that signal picked up as far as we would like it to
go, but I can't build a tower that tall.
Steve.
230
MR.
EDWARDS: A few other comments. It gets very difficult -- you're quite right
that ‑‑ in fact, one of my common complaints at many
levels is that too many people, including the Commission at times, tend to look
at contours as fences and you have coverage inside and there's no coverage outside. It's nothing more than a measure of a signal
strength at a certain distance from the radio station.
231
But it's very
difficult to compare AM and FM. It's
really very much apples and oranges. I
was just asking George what the nighttime coverage of CKY is like, and indeed,
if you were to have driven in at night, you probably would have found not
nearly as much difference between CKY and CITI, for example, as there is in the
daytime.
232
CITI, or any
other Winnipeg FM station, will also cover well outside of the contours that
are shown on the maps. But the proof of
the pudding in a sense is if you look where people are, there's roughly a ten
percent difference in the daytime and it would be considerably less at night.
233
THE
CHAIRPERSON: But, it's not fair to
compare CITI to this, is it? Because
CITI has double the normal --
234
MR.
EDWARDS: It does and perhaps I
shouldn't have even used that. I could
show you some interesting maps that I have here. A lot of us who have grown up in the broadcast business tend to
think of power in AM terms. The lower
the frequency the greater the difference in power, the greater in difference
the power has.
235
But you would
be quite shocked, I'm sure, if you saw the difference between CITI's coverage
at more than double the current limit, because of its grandfathered status,
with the now traditional 100 kW stations.
You don't get a lot of bang for your buck when you go to extremely high
powers in FM the way you do in AM.
236
That's another
reason why it wouldn't be fair to characterize these various alternatives as
enormously different from one another.
Even when they're slightly directional, it has very little impact on the
actual coverage.
237
I could give
you a little anecdote of an antenna that was replaced in North Bay recently due
to a lightening strike. The effective
radiated power was dropped from 100 kW to 15 kW on a temporary basis and nobody
in the main coverage area even knew that anything had changed.
238
There are a lot
of factors involved, but at the end of the day, in FM power isn't nearly as
relevant as it is in AM. Height is much
more important.
239
THE
CHAIRPERSON: Thank you. That's all my questions. Commissioner Cardozo has a question or two.
240
COMMISSIONER
CARDOZO: Just a couple of short
questions. I wanted to understand a
little further the issue of diversity in the market, the discussion that you
had with Commissioner Cram in terms of the new format you're looking at.
241
As I understand
it, the difference between Classic Rock and Classic Hits is something you
understand quite well, and I can accept that there is some difference but it
isn't monumental in terms of being a new format for the market maybe. But I look at some of the other current
stations. CJKR has Mainstream
Rock. CKMM has CHR Rhythm and CHIQ has
adult CHR. And all these fit in in the
Commission's category 2, subcategory 21, which is I think the language you
understand but most other people ‑‑ most other Canadians don't
and wouldn't care, but we have to sort of look at formats in these categories
and subcategories.
242
We don't
regulate mainstream formats, but what we're looking at in the context of a
competitive hearing is perhaps two issues.
One is diversity, but more importantly, how does your format fit into
your business case? And as I see it, in
terms of diversity, there's not a lot of diversity that you would be adding by
moving from the CKY-AM that you have to the FM that you're applying for, but
that there is a business case.
243
As Mr. Miles,
you said, despite CKY's strengths, AM is dying as a music format and everyone
needs to go to FM. And certainly, a
Classic Hits format is a lucrative format, good for your business case. So beyond that, I don't see where your case
is. What is in it -- and the real thing
I'm asking is what's in it for the listeners of Winnipeg? What will they gain by this flip?
244
MR. MILES: Again, I'll ask Sandy to just sort of work
through it. But I think what we have to
take a look at is how many stations are serving the females in the marketplace
and how many stations are serving males.
Rock traditionally is a male-based format. And so therefore, it's ‑‑ taking a look to make
sure that we weren't duplicating, I think it's up to the six versus two, Sandy?
245
MR.
SANDERSON: This radio stuff, it always
gets me. I think what Gary said, that
male and female, there's a -- it's not anywhere near even at the moment. There's lots of room in the rock area,
especially in Winnipeg.
246
CKY's audience
is about 46 percent male, which is higher than the four female FMs and lower
than the two rock stations. There are
some ‑‑ hopefully some ‑‑ all the males and
some of the females will come over to a station that is ‑‑ you
know, we cannot put the station on FM.
We can't serve all those listeners on FM. So we're going to try and do it, and because of the heritage of
the station, we want to do it in the rock idiom, the rock general idiom.
247
CITI's format
is Classic Rock that really rocks, is what we call it. It's harder, it's more male than what we're
looking at for the new station, and it's album cuts. I guess ‑‑ these sound like big differences to
me and not to real people. But all I
can say is that we will separate. We
will make sure they are separated. It
doesn't make any sense from a business point of view to have two stations going
after the same audience.
248
COMMISSIONER
CARDOZO: I accept that you see the
difference between the two stations, but I'm thinking that when you take into
consideration the other three FMs in the market that I mentioned, won't you have
sort of five doing fairly similar stuff?
249
MR.
SANDERSON: Well, I think that the ‑‑ again,
the male/female skew. CHUM's audience
is 29 percent male. The Top 40 is 34
percent male. The soft A/C is 38
percent male. The country is 43 percent
male but it's ‑‑ you know, that's almost in a place by
itself. And I think this would rank up
there in the 60 to 70 percent male orientation.
250
MR. MILES: Just to clarify what Sandy just said, is
that the three stations that you discussed that weren't the rock-based stations
have more predominantly female and so we would consider them to be a
female-based format. Which, by the way,
could change at any given time as we all know, and even as we're sitting here
today, I'm sure that there are stations contemplating changes in their formats
across the country as a result of new licences, and that's going to continue to
happen.
251
COMMISSIONER
CARDOZO: And it was your preference as
opposed to just applying for a new FM, you wanted the flip of the AM to FM,
meaning you don't see yourself continuing with CKY in any way?
252
MR. MILES: No, we applied for a conversion and that's
what we wanted to do. We wanted to do
it for a number of reasons and that is that that's part of what we're doing all
across our division, which is to convert AM radio stations that we can't find a
specialty niche format for and flip it over to FM.
253
Look it, if
there was a great new AM format that came back in the next couple of years, I
don't know, would we come back and ask for it?
Maybe. But if the Commission
licenses a number of radio stations for the Winnipeg market, this is going to
continue to be not only a fairly competitive marketplace now but the
competition will increase. So we sure
better be sure of the format.
254
The problem is
right now we don't have a format for CKY-AM on the oldies vein and I don't know
when those regulations would change and that's not for the discussion here
today.
255
So that's the
problem, we don't have a good format for long-term growth for our two licences,
one of which currently is an AM and an FM in Winnipeg, and therefore we still
wish to contain the two licenses in this market.
256
COMMISSIONER
CARDOZO: Okay, thanks very much.
257
MR. MILES: Thank you, sir.
258
COMMISSIONER
CARDOZO: Thank you Madam Chair.
259
THE CHAIRPERSON: Mr. McCallum?
260
LEGAL
COUNSEL: Thank you, Madam Chair. Would you have -- that chart is ‑‑
you've described the chart and spoken to the chart. Would you have a copy of that chart that you could file for the
record?
261
MR.
EDWARDS: Would you like to have that
one on the wall?
262
LEGAL
COUNSEL: I'm thinking of a paper
version of it. That's a little easier.
263
MR. MILES: That one doesn't fold very well, nor does it
copy very well. But yes, we will supply
that.
264
LEGAL
COUNSEL: Thank you. Maybe when you come back in Phase II of this
process you can provide it at that point in time?
265
MR. MILES: Sure.
266
LEGAL
COUNSEL: Thank you. I'd like to take you, if you like, to one of
the questions that Madam Chair asked you, but I'd just like to follow up a
little bit on it, and it deals with the financial operations and in particular,
the chart labelled page 5, where it says the first year of operation will be
2001 and then it has first year up to seventh year. Do you have that available?
267
And as you
discussed with Madam Chair there was a negative PBIT, I think, for that
particular year. But if you go to the
line "Depreciation for year two" in that chart, the number that appears there
is more than double the number that appears on the same line for each of the
other years. Is that correct?
268
MS.
STASIUK: I believe it is. We anticipated some capital additions in
regards to the tower that we would build and I think there are a number of
assets that make up that number.
269
LEGAL
COUNSEL: So you'd be doing that in year
two as opposed to year one? I just find
it so odd that the number in year two would be so much greater than the numbers
for all the other years, where the numbers for all the other years are level.
270
MS.
STASIUK: I would have to go back and
check the number at this time.
271
MR. MILES: And we will file that with you but it may
well be what we consider to be year one and year two may be different in your
mind versus our mind, but we'll file that with the Commission.
272
LEGAL
COUNSEL: Okay. Again, if you can do that in Phase II, that
would be good.
273
MR. MILES: Sure.
274
LEGAL
COUNSEL: And can I just come back again
to the sales and promotion line on that same chart. Again, the number for year two is so much greater than the
numbers for the other years. You
answered, I think, earlier that there would be a big bump in sales and
promotion that year and I can understand that, but again, in looking at the
depreciation line, you should look at that line as well and see if that line is
correct?
275
MR.
SANDERSON: No, that line is correct
because that's the standard plan that we always do when we launch radio
stations, whether they are new licences or conversions of AM to FM. Traditionally, sort of, we get the station
on the air, make sure that everything is working well, that we've figured out
the right mix for the clients that we're trying to serve and the radio
listeners, and then launch a promotion.
276
LEGAL
COUNSEL: Well, thank you. Finally, I think, in responding to one of
Madam Chair's questions you said that you thought you would be taking audience
from Corus, which I imagine is the CJKR-FM station, is the station from which
you would estimate taking a market share; is that right?
277
MR.
SANDERSON: That's correct, yes.
278
LEGAL
COUNSEL: Do you have any estimate of
how much percent of market share you might be taking from that station?
279
MR.
SANDERSON: It's difficult to know until
the dust settles, until we know exactly what the whole male side and how many
stations there are dividing it up.
280
MR. MILES: I think what you find happens with more and
more licences is that, at the end of the day, you don't take half an
audience. Look it, they're great
programmers over there and they're going to decide that we're going to get less
than we want and we'd like more than they're going to give, but that isn't the
way that it really works.
281
What happens is
that you start to lose some fringe ends of a demo that's not completely served
by your radio station and those numbers tend to be less and less than they used
to be when there were just a rock format and another rock format came on, or if
you had an AM country station and an FM country station came on.
282
So I think
that, to Sandy's point, it's not as clearly defined any more.
283
LEGAL
COUNSEL: Would you have any idea as to
the dollars you might be taking?
284
MR. MILES: Dollars are a share of ‑‑
are a result of a share of audience and we continue to take a look at whether
we can overachieve on that share, but it's going to end up with BBM numbers and
share and the number of market dollars that we can either increase this market
or not.
285
At the end of
the day, I think that with more radio licences, there's always more people who
come to the radio medium for advertising.
We've got better trained salespeople out on the street. And sure, there is an immediate dip in all
of the licences when a new station comes on.
It doesn't really matter whether you're even in that format or competing
against the format. There are only so
many radio dollars. We license a new
radio station, it doesn't mean there's going to be another $2 million come into
radio immediately.
286
But we believe
these days that the radio industry is now starting to turn out better and more
professionally trained salespeople, we have more people on the street, that
eventually we start to persuade people to come over to the radio medium. It's a great advertising medium. It's particularly great in periods of down
times and reduced economy. It is a very
effective radio thing.
287
So I think
that, in the long run, what we have seen in all of the markets we're in,
eventually the plimsoll line comes back up and everybody continues to go along
according to the share of their audience.
288
LEGAL
COUNSEL: Thank you Madam Chair.
289
THE
CHAIRPERSON: Thank you, Gentlemen, Ms.
Stasiuk. We will now take our morning
break. We'll take twenty minutes and be
back in twenty minutes.
--- Upon
recessing at 1020/ Suspension à 1020
--- Upon
resuming at 1040/ Reprise à 1040
290
THE
SECRETARY: Thank you Madam Chair. The next application is by Corus Radio
Company for a licence to operate an English language FM station at Winnipeg. The new station would operate on frequency
99.1 Mhz with an effective radiated power of 100,000 watts.
291
MR. BUCHKO:
Good morning Madam Chair and Commissioners.
My name is Garth Buchko and I am the General Manager of Corus' Winnipeg
radio stations, CJOB and Power 97.
Before we read our opening statement, I would like to take this
opportunity to introduce our panel.
292
Seated in the
front row, to my immediate left, is John Hayes, President of Corus Radio. To his left is Kathleen McNair,
Vice-President, Regulatory Affairs, at Corus Entertainment. On my right is Sherrie Johnston, Operations
Manager at CJOB and Power 97. In the
back row, at the far left is Jennifer Holland, Manager of Financial reporting
for Winnipeg Radio and at her right, is our research consultant, John Yerxa, President
of John Yerxa Research.
293
In addition, I
would like to introduce David McLeod, General Manager of Native Communications
Inc., who is seated in the audience today.
294
We are pleased
to be here today to present to the Commission our application for a truly
distinct new FM station to serve Winnipeg.
295
MR. HAYES: A leading Canadian entertainment company,
Corus operates 52 radio stations in a variety of formats from Quebec to British
Columbia. Our stations have become
renowned for the innovative mix of music and spoken word programming they bring
to their respective communities.
296
Corus stations
have undertaken extensive market research to ensure that our radio services are
providing unique programming choices to local listeners. In fact, this research has resulted in Corus
launching a number of new, diverse formats in communities across the country.
297
We contribute
almost half a million dollars each year to Canadian talent development
initiatives and millions more in benefit commitments. Furthermore, our stations have been credited with launching the
careers of many prominent Canadian artists, including the Barenaked Ladies,
Nickelback and Winnipeg's own, The Watchmen, to name a few.
298
Although Corus
Entertainment is a relatively new company on the Canadian radio scene, its
radio group is a compilation of radio stations from across Canada with long
histories of community service and commitment to news and information
programming. Indeed, one of the
benefits to Corus of being a new entrant as a radio owner is its collective
heritage, including the many accomplishments of Winnipeg's CJOB.
299
It is because
of this acquired heritage and our respect for it that Corus has taken an active
leadership in the Canadian radio industry.
We were influential in the launch of digital radio in Canada and have an
aggressive Internet strategy. We have
joined forces with four leading U.S. radio broadcasters to create the Local
Media Internet Venture, a project that will result in the creation of the first
international network of local lifestyle web portals.
300
Radio's
greatest inherent strength will always be its ability to respond instantly to
the needs and interests of a local community.
In fact, this application by Corus proposes a format that emphasizes
news and information in the form of 25 percent spoken word programming. This way, the discussion of topics of
interest in Winnipeg can be expanded to the FM dial. Our current radio stations, CJOB and CJKR-FM, are a fixture in
the Winnipeg community and will continue to be in the future.
301
MR.
BUCHKO: Corus has very strong ties to
Western Canada and is committed to developing its presence in the West,
especially in Winnipeg.
302
Should this
application be approved, we will introduce a new and innovative format for
Winnipeg listeners. This new station
will complement our existing stations, which deliver a high level of local
music and spoken word programming to our listeners and whose commitment to this
community is unparalleled. Furthermore,
our radio staff in Winnipeg will increase significantly.
303
Our Am station
is recognized as a leader in Canadian broadcasting and is recognized as
Winnipeg's new, information and sports leader.
When breaking news hits Manitoba, its listeners rely on CJOB. IN 1997, as all Canadians watched as
Manitoba was hit by the "Flood of the Century," during this disaster CJOB acted
as a lifeline for Manitobans. CJOB
staff was called upon to keep the people of Manitoba informed about the
constantly changing levels of the Red River.
With CJOB's very own transmitter submerged in water, we kept serving
this great community from a back-up transmitter with an effective radiating
power of only 500 watts. As a lifelong
Winnipeg citizen, I can tell you, I have never been more proud of CJOB. In recognition of CJOB's efforts, it was
awarded the CAB Gold Ribbon award for top news coverage, one of the industry's
highest honours.
304
Just two weeks
ago, we were notified that CJOB and CJOB's Charles Adler will be receiving the
Patriot Award from the Royal Military Institute of Manitoba in recognition of
our coverage of the 9/11 catastrophe.
As far as we know, CJOB will be the only media outlet in Canada to be
recognized in such a manner.
305
CJOB's
commitment to both professional and amateur sports in Manitoba is
unrivalled. Not only is CJOB the voice
of the CFL's Winnipeg Blue Bombers, the AHL's Manitoba Moose and the Northern
League's Winnipeg Goldeyes, its sponsorship dollars have assisted in bringing
such world class events as the AT&T Canadian Senior Open Golf Championship,
the World Junior Hockey Championships and numerous world curling championships
to our region. We were also the
exclusive radio voice of the Pan Am Games.
In addition, amateur sports in Manitoba would likely not receive any
coverage of their events and games without tremendous support they receive from
CJOB.
306
We are also
very involved in a number of charitable causes in the Winnipeg area. Over the last few years, the CJOB Radiothon
has raised over $200,000 for the Winnipeg Children's Hospital Foundation. In addition we are the number one
contributor to the Manitoba Special Olympics, donating more than $100,000
annually in cash and promotional value.
307
Power 97,
Corus' FM station in Winnipeg, is a rock leader. It is the only mainstream rock station in the market that
provides a unique and relevant programming choice to its core demographic, men
18 to 34 years of age. Like its AM
sister station, it too has a long tradition of providing quality programming to
its listeners as well as exceptional community service.
308
Through the
presentation of a local summer concert last year, Power 97 was able to raise
approximately $30,000 for children who have been orphaned by war in Third World
countries. Power 97 also played an
integral part in developing and presenting Winnipeg's Spiritfest, an outdoor
concert series. Power 97 helped stage
four different concerts, each benefiting a different charity, which were
attended by hundreds of thousands of Manitobans.
309
Other charities
Corus is affiliated with in Winnipeg area include the Winnipeg Harvest and the
Christmas Cheer Board. The Winnipeg
Children's Hospital Foundation, the Special Olympics, the Winnipeg Harvest and
the Christmas Cheer Board have all filed interventions in support of this
application. In fact, we can say,
without a doubt, that our stations contribute more directly and indirectly to
Winnipeg's non-profit groups than all the other radio stations in this market
combined.
310
Clearly Corus has
strong roots in Winnipeg, roots we are very proud of and looking to build
on. In fact, this commitment to the
local community will be the cornerstone of our new station.
311
MR. HAYES: Our proposed service will truly fill a void
on the FM dial. No existing FM station
in the Winnipeg market effectively provides either '50s, '60s and '70s hits
blended with soft adult contemporary selections or extensive news and
information programming.
312
Our new FM
station will play a unique blend of soft adult contemporary selections. However, unlike a true soft A/C format, our
station will also feature gold from the '60s and especially the '70s, music
that many stations have walked away from.
313
For example,
you might hear songs by older artists such as the Beatles, Simon and Garfunkel,
Dan Hill, Gordon Lightfoot and Linda Ronstadt, mixed in with recent selections
from Bruce Cockburn, Joni Mitchell, Bette Midler or Lionel Ritchie and other
A/C artists with significant gold libraries.
314
In addition to
the musical selections, the station will feature a high level of news and
information programming throughout the day, including a number of new locally
produced programs. For instance, on
weekend morning the station will broadcast a locally hosted magazine style
program consisting of news, information, music, interviews and lifestyle
programming.
315
Corus'
extensive experiences in programming news and information for CJOB and music
across our many stations makes us ideally suited to operate this station. Not only will our new stations provide
Winnipeggers with a unique programming choice, but it will provide an
underserved audience with a service they truly want as well, as demonstrated by
the research filed with our application.
316
MS.
JOHNSTON: If licensed, our new FM
station will not only increase the diversity of programming available on the FM
dial, but it will also result in a number of exciting new initiatives that will
benefit the residents of Winnipeg and the Canadian broadcast system.
317
Over the course
of the first licence term, Corus will spend $3 million to support Canadian
talent development and Aboriginal services in Manitoba, more than any other
applicant has promised.
318
Of the $3
million in direct expenditure, the largest portion -- more than $1 million --
will be give to Native Communications Inc.
NCI is a non-profit organization that provides Aboriginal language and
cultural radio and television programming throughout Manitoba. Corus and NCI have worked together in the
past on a number of occasions to offer Manitobans in remote communities,
particularly Northern Manitoba, programming that otherwise would not be
available. Over the last year, we
permitted NCI to broadcast Winnipeg Blue Bombers games at no charge. NCI sold advertising during these games and
was able to use the revenues generated to fund its operations.
319
As noted by NCI
in its intervention filed in support of this application, this initiative is a
seven-year solution that will not only help build an Aboriginal broadcast
industry, it will change lives.
320
Corus has also
committed significant resources to Canadian talent development. Corus will contribute $490,000 to the
production of compilation CDs featuring emerging Canadian soft adult
contemporary artists. The CDs will then
be distributed to radio stations across the country for airplay.
321
In addition to
the compilation CDs, Corus will also spend $840,000 on a live concert series
featuring emerging and established Canadian adult contemporary acts.
322
The exposure
these artists will receive through these two initiatives will have a tremendous
impact on their careers, thus building on Corus' well known commitment of
promoting and launching the careers of Canadian artists.
323
In addition to
these initiatives, Corus has also committed more than $500,000 in support of
the Winnipeg Symphony, the Manitoba Opera, Canadian Music Week and FACTOR.
324
MR.
BUCHKO: The Winnipeg radio market is
very competitive with more stations per capita than any other of the top 10
markets; however, it is also a market that is in a state of change.
325
A number of
recent transactions have changed the face of the Winnipeg market. CHUM's
acquisition of CFWM-FM from Standard gives CHUM two FM stations and one AM
station in the Winnipeg market.
Furthermore, Standard Radio's acquisition of Craig Broadcasting's two
stations was recently approved, giving it two FM stations as well.
326
With the
market's rate of growth and the efficiencies and synergies Standard and CHUM
can realize, respectively, with their new stations, the market will only become
more competitive. Consequently, in
order to maintain competitive balance, Corus should be awarded this licence.
327
Corus' position
in the Winnipeg market is heavily dependent on the continued success of
CJOB. However, the long-term viability
of AM radio is in question. We believe
that approving this application will be crucial to ensuring that Corus remains
competitive with other Winnipeg radio operators.
328
As noted in our
application, we expect that our audience will be drawn effectively from CJOB
listeners, as well as those who listen to other AM stations in the market. Moreover, we expect that we will repatriate
listeners from out-of-market adult contemporary stations that can be heard in
Winnipeg. As a result, our new FM
station will have a limited impact on our competitors in Winnipeg, but we will
ensure a competitive balance in the market.
329
In conclusion,
we feel that our application meets the Commission's criteria relating to the
issuance of new licences. It will
introduce a new, diverse programming voice into the market. It will result in over $3 million in
incremental CTD initiatives and support for Aboriginal programming in
Manitoba. Furthermore, the approval of
this application will help maintain competitive balance in the market without
impacting the revenue of other stations.
330
CJOB and Power
97 have a long and proud history of contributing to the Winnipeg
community. If licensed, our new station
will build on that tradition.
331
For all these
reasons we ask that the Commission approve our application. That concludes our opening remarks. We are pleased to answer any questions that
you might have.
332
THE
CHAIRPERSON: Thank you, Commissioner
Cardozo?
333
COMMISSIONER
CARDOZO: Thank you Madam Chair and good
morning, Mr. Buchko and colleagues.
334
I have a series
of questions and let me just tell you the topics that I'll be going
through. We'll start with the NCI
package; second, the other CTD benefits that you've suggested, or projects; and
third, local reflection; fourth, economic and business issues; fifth, technical
-- tell me if I'm talking too fast -- fifth, technical; and sixth,
ownership.
335
That's just to
give you a sense of how we'll be going, and some comments you may want to keep
under certain sections but certainly make them whenever you feel you wish. Indeed, the questions are designed, as you
know, to get some more information that we don't have on the file so that we
have as full a file as possible so we can make a decision at the end of the
day.
336
Let me start
then with the NCI package. If you can
give me a little more detail ‑‑ and indeed, I notice that NCI
will be appearing during the intervention stage and we can certainly pursue
some of that with them ‑‑ but I just wanted to get a better
sense of what the package will be for.
In the supplementary brief, it suggested that the money would be for
operational and extension of the network.
In the intervention from NCI there is also talk about a training
program. Could you give us a breakdown
of how that money will be used?
337
MR.
BUCHKO: Mr. Commissioner, first of all,
from the time we put the application in from further discussions with David
McLeod and the NCI board, it was felt that the money would be better purely for
operating from their standpoint. So in
the end, we've said, we will give you $150,000 a year and you do with it as you
please. For which, they've told us,
they would like to develop, they would like to find Aboriginal talent, develop
them and pay for all the costs of developing that talent. So in the end, we'll give them the money
and, as long as they can use it for operating purposes, we really have no say
how they are going to use it, as long as it does something to benefit the
growth of the Aboriginal broadcasting in Manitoba.
338
COMMISSIONER
CARDOZO: Okay, so what ‑‑
I guess it's Mr. McLeod's letter of intervention talks about five Aboriginal
students will benefit from this fund a year and two would have jobs as
well. Is that the kind of project
you're looking at?
339
MR.
BUCHKO: I'll ask Sherrie Johnston, who
is the operations manager of CJOB and Power 97, who has been very involved in
the Aboriginal development of broadcasting in Manitoba.
340
MS.
JOHNSTON: Thank you. I'll just tell a little story that goes back
several years. Several years ago, the
management team of CJOB and Power 97 determined that the principle of
employment equity is a good business practice.
Indicators tell us that by the year 2013 the Aboriginal population in
Winnipeg will be at least 100,000 people.
That's a significant growth from what it is right now. And we believe that it's a good business
practice, particularly on CJOB, that our workforce reflect the makeup of the
community.
341
So at that
time, we opened up our hiring process and proactively sought employee
candidates from Aboriginal and visible minority groups, and unfortunately, we
found that there's a very limited pool of talent available within those
groups. So what this opportunity gives
us, through our benefit package to support the Aboriginal community, to use NCI
as a training ground and to develop these people, and then eventually we would
hope to hire them at our stations and bring them into mainstream broadcasting.
342
So it
represents a win-win for everybody.
It's good for NCI; it's good for the Aboriginal community; and it's of
course good for Corus because we'll be able to build a staff complement that
reflects the community within which we live and do business. Thank you.
343
COMMISSIONER
CARDOZO: So at this point your stations
don't have any Aboriginal employees?
344
MS.
JOHNSTON: Not at this time.
345
COMMISSIONER
CARDOZO: Okay. Tell me more about what you've done in terms
of your relationship with NCI. You
talked about the Blue Bomber games simulcast or transmitted across the
province.
346
MR.
BUCHKO: Actually, our relationship
probably dates back about two years when we started working together. I guess it's a relationship built originally
out of need ‑‑ we needed to expand our broadcast coverage for
the Winnipeg Blue Bombers ‑‑ but then it also became a good
common relationship based on satisfying each other's needs.
347
I think the NCI
provides a fabulous resource for the Northern community which otherwise
wouldn't be there. When David McLeod
and I first sat down and talked about Winnipeg Blue Bombers, he made it clear
that they had no money to pay us for the service of being supplied 20
games. In the end, we give it to them
for free. We deliver it to them for
free and they send it out to all their stations throughout northern Manitoba
and, in fact, Selkirk, Manitoba. They
generate all the revenue and they keep all the revenue in return for that.
348
We also
recently ‑‑ NCI has an annual talent search. They bring in acts from all over Manitoba,
they build a CD, and they ran into some technical difficulties where they
didn't have the technical ability to run a clear service through all their
radio stations. There was a hum, there
were some technical problems, of which I know nothing about, but there was a
definite problem there. David called
myself and we put our engineers together and we provided all the service, all
the equipment and all the knowledge at no charge, just to help them out and
make sure that their over the air broadcast was as technically sound as
possible.
349
COMMISSIONER
CARDOZO: With regards to the Blue
Bomber games where you say they kept the revenues from those, what revenues
would those have been? Were they doing
separate advertising?
350
MR.
BUCHKO: They would sell all the
commercials available in the games.
They would sell promotional sponsorships --
351
COMMISSIONER
CARDOZO: So they were getting a feed
just of the game from you and then they were putting in their own ads?
352
MR.
BUCHKO: That's right. They would get a clean feed and they would
replace our commercials with their commercials. And I think they generated somewhere between twenty-five and
thirty thousand dollars in revenue, which is ‑‑ from their
standpoint, that's fairly substantial, and great programming too.
353
Outside of
Winnipeg, from our signal reach, especially since in the fall we have a limited
pattern when our night pattern goes down, it gave all the people north of
Selkirk, Manitoba, an opportunity to listen to Winnipeg Blue Bomber football.
354
COMMISSIONER
CARDOZO: Okay, let me just take a
moment to let you know that we certainly recognize what you're doing to assist
Aboriginal broadcasting. As you've
noted in your application, in our Calgary decision we did encourage commercial
broadcasters to step up to the plate and assist Aboriginal broadcasting where
possible. So we certainly note that and
in terms of the proposal here, that's part of the mix that will be part of the
decision. But I just want to take a
second to note what you have done so far, and it's nice to see, too, that
people do read our decisions.
355
Let me move to
some of the other talent development issues.
The live concerts. I just wanted
to verify that the promotion aspects that you're talking about there, would
those be third-party promotions? The
reason I say this is because, as you may be aware, under the expenses that are
allowed for direct and indirect talent development, promotion done by your own
station would be considered an indirect benefit, whereas promotion done in
third-party areas, whether newspapers or other radio stations or other media,
would be a direct expenditure. So where
you've talked about a certain amount of the money for the live concert series
and the compilation CD, is the promotion or advertising aspect of a third party
nature? Do you understand my question?
356
MR.
BUCHKO: Absolutely, and Sherrie can
walk us through that.
357
MS.
JOHNSTON: Thanks, Garth. First of all, the complication CD, $70,000
per year. That's a home-grown CD
project that will showcase emerging Manitoba A/C artists. We'll invite independent artists to submit
their original songs for consideration, and then a panel that we'll put
together of major record label reps, perhaps recording artists like Burton
Cummings or Chantal Kreviazuk and of course, music and program directors from
across the country, the people who decide what goes on the radio. Those are the types of people that we will
have review all of the applicants.
We'll select ten to put on the CD and then the CD will be promoted and
distributed Canada-wide for airplay.
358
The
expenditures are all direct. Promotion
of the contest, we would do that pre and post and that would be advertising
third party as well as promotion on our own stations, including other Corus
stations across the country. That would
be $50,000, and then $20,000 would be studio production of the artists, and
then of course CD production and distribution.
359
COMMISSIONER
CARDOZO: I just wanted to clarify that
when you're doing the reporting to us at the end of the day, the promotion part
where I think you put, for example, $20,000 under the compilation CD and an
amount for the concert series, the promotion and advertising part would clearly
be third party and anything you do in house would be considered an indirect
benefit.
360
MS.
McNAIR: That's correct. We would report the promotional dollars to
third parties as a direct expenditure.
361
COMMISSIONER
CARDOZO: And just one thing to go back
to the NCI project, I'm sure they do appreciate that you're prepared to give
them funds and they do with it what they feel, there would still be the
reporting that it would meet some objectives of our talent development
regulations.
362
MS.
McNAIR: What we would propose is that
we would in it, when we give them the funds is say that the funds would be used
to support fulfilment of the objectives of the Canadian Broadcasting Act.
363
COMMISSIONER
CARDOZO: On the concert series, would
there be an admission fee? Are these
sort of the concerts that you've talked about in your opening that Power 97 does? And I just wanted to understand if there was
an admission fee, how that would fit into the mix of the money that you're
putting in?
364
MS.
JOHNSTON: The $120,000 per year for the
live concert series, all of that money will go directly to the support and
promotion of Canadian talent. So most
of those funds, most of the $120,000, will go directly to the performers that
we have in our concert series.
365
Other costs
that we would incur, promotion of the event, technical hard costs, venue
insurance. And to answer your question,
would there be a fee to the concert?
Probably, and I think that would be to help us offset some of these
additional costs.
366
COMMISSIONER
CARDOZO: These projects ‑‑
either the concerts or the compilation CDs -- would they be associated
with any of the other similar projects that Corus does elsewhere in the
country?
367
MS.
JOHNSTON: I think that would be a
goal. Our live concert series and the
CD compilation are very Manitoba-focused projects, but it would be wonderful if
we could take advantage of the Corus network, and perhaps ‑‑
if the CD compilation disc, if we had ten winners on it that we wanted to
promote across the country, perhaps two or three of those could become part of
the live concert series and then perhaps it gets even bigger and becomes a
Canada-wide contest where Corus can showcase nationally winners.
368
COMMISSIONER
CARDOZO: What is your experience with
compilation CDs? It's something that
we've been doing for a while and I just wanted to get your sense of are they really
useful in terms of artists getting on the air?
Or is it something that broadcasters do because they agreed to do it in
order to get a licence and so you just slap ten songs together and put out a
CD? Do you find that those songs
actually get on air, and wouldn't get on air otherwise?
369
MS.
JOHNSTON: I would say that the projects
that we do, we're the best promoters of them because often it depends on what
format the music is in. Because we've
done a home-grown project way back when when we were CKIS, and yes, I think
they're good for the artists. They are
exciting. We usually take the contests
and the shows out to local venues so there's good community support. And anything, even the production aspect,
where we take the bands into a studio and cover the hard costs of the
production and the CD, that's beneficial to them if they want to market
internationally.
370
COMMISSIONER
CARDOZO: Okay.
371
MR.
BUCHKO: There's a local, local band in
Winnipeg that came to us two years ago, which we never included in our Canadian
talent development money. They're
called Jet Set Satellite. They walked
in with a CD they burned themselves and walked in and said, how do we go about
getting this played? Where do we
go? Our programming team sat down with
them, introduced them to music people, introduced them, told them the ropes and
where to go, we helped them produce the CD in good technical quality. And they've, quite honestly, become Power
97's house band when we have promotions, when we have events, when we do our
major BBM promotions and we have 600 people there, they play for free for us
because of the relationship we've built.
372
And Jet Set
Satellite is probably two years away from making it big. Last summer they were on a major film
soundtrack with a song. So they're just
beginning it. And I think to answer
your question, and Sherrie answered most of it, I think it's our obligation to
find the Jet Set Satellites, the Watchmen, the Barenaked Ladies, and I know the
Edge in Toronto broke Barenaked Ladies and gave them the opportunity.
373
Is it going to
be all ten of our compilation acts?
Probably not. But if there's one
out of ten and if we don't do these types of initiatives and give bands
opportunities, then they probably will remain in their garage playing the music
that they're playing today.
374
COMMISSIONER
CARDOZO: Your sense of it is that once
you put out that CD that radio stations are playing those songs?
375
MR.
BUCHKO: Radio stations -- the majority
do. Like I said, there might be one or
two acts, two songs on the compilation CD, but any ‑‑ even the
Rolling Stones and Mick Jagger's new CD, there's really only one song that's
being played on commercial radio so it -- I think that speaks to whether you're
local Canadian or you're an international star. Canadian radio stations will play the best songs on that CD, and
generally there's one or two. There
should be one or two.
376
COMMISSIONER
CARDOZO: And generally, who do you send
these CDs to?
377
MR. BUCHKO: We haven't done one since our CKIS days, so
I really can't speak from experience.
378
COMMISSIONER
CARDOZO: Who would you plan to send
this one to?
379
MR.
BUCHKO: We would send them to all the
soft A/C stations in Canada. We would
obviously send them to all the Corus radio stations, 52 of it. CJOB plays a very limited amount of music
but I can tell you that when there's a local entertainment act that comes into
our station with a song, we definitely try to play it and highlight it.
380
So all the soft
A/C stations in the country, all the oldies-based stations and all the Corus
stations will definitely be asked and encouraged to play the CD compilation.
381
COMMISSIONER
CARDOZO: Okay, and who will be
responsible for these initiatives? Will
that be you, Ms. Johnston? Who would be
responsible for keeping track of the various initiatives and reporting?
382
MS.
JOHNSTON: Yes, I would work with the
program director of the new station to quarterback the project.
383
COMMISSIONER
CARDOZO: Okay, thanks. Let me ask you some general questions on
diversity with regards to these projects.
Are we talking for the most part, with the concert and the compilation
CDs, that you'd be focusing on Winnipeg and Manitoba artists and groups?
384
MR.
BUCHKO: Yes, to be direct. There's a great abundance of talent in this
city and province. My colleagues before
us talked about what a great city this is for rock and what a great city this
is for talent. There are so many people
out there who are looking for an opportunity just to be noticed or get the
funding to do what we're talking about.
There is the Watchmen, which is another band Power 97 helped promote and
helped launch, or another band that was touring the bars and no record company
would give them the light of day. And
once again, we did and they're now a cross-Canada, soon to become an
international band.
385
There is plenty
of talent in Winnipeg and Manitoba who should be recognized and we plan on
helping the soft A/C side of the music because nobody is doing it right now in
Winnipeg. Everybody is focusing on the
rock bands and we'd be the only one who is focusing on the soft A/C side of the
music.
386
COMMISSIONER
CARDOZO: You see yourself promoting the
diversity of talent, the cultural diversity, the Aboriginal reality of the
talent that's out there?
387
MR.
BUCHKO: Yes, we do. David and I have talked regularly
about ‑‑ they have their talent search and there's obviously
some real good talent that comes out of that.
If there's a musical group, a talent, who fits our format, that wouldn't
stand outside of our format -- if it was a country-western song, obviously we
wouldn't play it, but working together as we have in the past couple years to
strengthen, not only Winnipeg's soft A/C but the Aboriginal broadcasting of
Aboriginal music would be a definite plus for us.
388
COMMISSIONER
CARDOZO: Now, with the program, your
initiative the Winnipeg cultural icons, with the Royal Winnipeg Ballet, the
Winnipeg Symphony and the Manitoba Opera, have you got agreements with them in
terms of how that money would be spent?
389
MR.
BUCHKO: We've had discussions. Part of our Canadian talent development
money right now goes to the Winnipeg Symphony.
We've had discussions on how we can extend that money but there are no
agreements, no formal agreements on how much money they would get. We would sit down with each individual group
to see which are the best ways to utilize those funds.
390
COMMISSIONER
CARDOZO: Okay. On local reflection, you plan to do a fair
amount of information and lifestyle programming. Could you tell us a little more about that?
391
MR.
BUCHKO: Quite honestly, I'm really
excited about the opportunity to provide a type of information that CJOB
provides on the FM dial, keeping in mind that this will be distinct, this will
be completely separate from CJOB. But
right now in Winnipeg, the average newscast on an FM station is about a minute
and a half long. FM stations across
Canada are looking for ways to get rid of news and information, not add to it.
392
Our FM station
will be 25 percent spoken word. Without
duplicating the services on CJOB, we will have our own news director, program
director on our new FM station. We will
have our own dedicated news team, and we'll be able to share some of the
resources with CJOB when it comes to breaking news stories. If there's a fire downtown or if Jean
Chrétien is coming to town and he's on with Charles Adler in the morning, we
can use some of the bits from the interview with the CJOB personality.
393
But in the end,
the news delivering services of our new FM station will be completely
distinctive. Each area of the day will
have its own news gathering person and that news person will be writing the
news.
394
We will have a
five-minute complete newscast at the top of the hour, every hour throughout the
day from 6:00 a.m. to midnight. During
the breakfast and drive time, we will have a two-minute update throughout the
day, leaving out the 9:00 a.m. to 4:00 -- 3:00 p.m. We will have complete surveillances, weather four times an hour,
traffic four times an hour and the breakfast and drive home show and weather
throughout the day. We will update the
weather on a continuous basis throughout the day on our new FM station.
395
Sports
programming, sports news. CJOB is the
sports leader in Winnipeg and we are the voice of all sport in Winnipeg, be it
amateur or professional, and our FM station will have its own dedicated sports
people but we will utilize the resources and the services and the contacts that
CJOB has for interviews and for the extension on the FM dial.
396
And I can tell
you right now as an FM listener, there are no services available in Winnipeg
that will provide that kind of coverage on the FM dial.
397
COMMISSIONER
CARDOZO: Is there a certain focus that
would be different from CJOB in terms of the news and information staff? You said it's going to be different, but are
you skewing to a different age group or educational level or ‑‑
398
MR.
BUCHKO: Our target demographic is
35-64, which is where 58 percent of CJOB's audience lies. But our research shows that CJOB listeners
do not want to listen to news, talk, information programming all the time. They're switching to CDs and they're trying
to search for a music alternative on the FM dial that can still give them the
information programming they want. So
our FM station will still give them the music they want to hear, but will also
give them the full information packaging that they have.
399
Psychographically,
we will change the way we deliver news on the new FM station. It won't be the same, it won't be as
in-depth. CJOB does as much as
six-and-a-half to seven-minute packages top of the hour in breakfast and
drive. We won't be as in-depth, but
when it comes to business news and it comes to financial news and financial
reporting, updates during the day, our new FM station will focus on more
lifestyle issues too, besides doing the business updates and all those type of
thing. We're talking just a different
mindset of listener between AM and FM.
We need to tailor the news to an FM listener.
400
COMMISSIONER
CARDOZO: I wonder if Mr. Yerxa or
anyone else can give me any more information.
I'm still not clear as to how you've identified who those listeners
would be who would not be listening to CJOB or some other station. How are they not being served now?
401
MR. YERXA: If you don't mind, I would like to generally
start by talking about the market research because its results address the
question of diversity by touching on one of the most serious issues, I believe,
facing radio programmers, in particular A/C programmers across this
country. And apart from news, which
I'll address in a moment, one problem with market research over the past decade
is that, by asking questions of soft A/C listeners in particular ‑‑
like is soft A/C too boring or is it ever too slow ‑‑ this
process has, in effect, led many programmers to over-contemporise their formats
and in many cases, become too up-tempo for many 35 to 64 listeners, especially
those 45 plus years of age.
402
Consequently,
over the past decade, we've seen this push to contemporise or brighten up soft
A/C stations, and many A/C programmers, soft A/C, have simply assumed a more
mainstream mantle. Of course, their
efforts have generally succeeded because their previous mainstream competitors
have also moved towards a hotter or more contemporary stance, many becoming
adult CHR hybrids in the process, thereby opening the doors for these soft A/Cs
to shift more mainstream.
403
But
unfortunately, there now remains a whole batch of music that radio researchers
and consultants have walked away from.
You see, on the one hand, we no longer hear artists like Barbra
Streisand, Simon and Garfunkel, Anne Murray, Air Supply, Dan Hill and so on,
artists which comprise, for lack of a better word, I suppose, what I'll term
square A/C right now. Likewise, there
are acts like James Taylor, Paul McCartney, Carole King, Gordon Lightfoot,
Linda Ronstadt, Little River Band, and numerous other '70s based artists, who
for now I'll term soft rock, that A/C radio has also left behind.
404
While we
acknowledge that most former soft A/Cs have now evolved into brighter
contemporary sounding mainstream A/Cs, it is very important to recognize that
at least two market segments, as I've just described them, now remain severely
underserved. And sadly, most of those
soft A/Cs that have contemporised now wouldn't even think of going back to the
music that I've just identified because it's too old or too stale.
405
Of course, the
point is that this format's broadness is what will now attract a demographic,
combined with the incredible news commitment and information commitment that is
being made, that is now severely underserved, not just here in Winnipeg, but in
many markets across Canada.
406
Certainly there
are those who would still perhaps question this approach in that they would
think it is without precedent but I would respond that this concept actually
has its roots in the old Transtar 41 format of the 1980s, which was developed
by the research group out of Seattle and which helped to spawn the emergence of
the soft A/C format in the first place.
407
It also served
as the foundation for my approach when I first began to conduct research in the
late '80s and early '90s for stations such as CHFI in Toronto, KISS-FM in
Vancouver and so on --
408
COMMISSIONER
CARDOZO: Can I just interrupt you for a
second? I accept what you're saying in
terms of the music overall, but I wanted to know more just about the
information and news programming, what your sense is, where is the evidence or
where do you see people looking for that and not being served currently
elsewhere?
409
MR. YERXA: Within the research that we conducted, a
majority of people indicated to us that they would like to hear a local FM
station present news that is not presently available. And when we asked them if there was a station that could provide
news and information apart from the CBC, whether it was available, again a
majority indicated that it wasn't and that they would like to receive that on
the FM dial.
410
We also asked
how important it was that they be provided with news and information, and a
significant percentage, 59 percent, said that it was very important.
411
COMMISSIONER
CARDOZO: Okay, thanks. In terms of local reflection and local
involvement, what is your basic approach, Mr. Buchko, to connecting your
stations with the community?
412
MR.
BUCHKO: The majority of the
programming, 99.9 percent of the programming, will be done in Winnipeg from the
new FM station. All the newscasts will
be delivered locally, by local people, written locally. We propose in our plan to do a two-hour
evening talk show from 9:00 p.m. to 11:00 p.m., which would be an FM, something
new for FM in this city. It will be
done locally by a local individual dealing with lifestyle issues that are
important ‑‑ mainly targeted to females.
413
Saturday/Sunday
morning will be a lifestyle program that will be four hours each morning. It will be lifestyle, news magazine,
information program, tied in with music and all of our resources that we do on
a regular basis anyways. You tie in the
news programming, the lifestyle issues and all the interviews that we do during
the day, our commitment of 25 percent spoken word is quite easy to attain.
414
COMMISSIONER
CARDOZO: Is there room in your station
for local groups, non-profit groups et cetera to have ‑‑
do they get covered regularly? Do they
get their voice on the radio? Do people
who are running campaigns, the Heart and Stroke Foundation or whatever, do they
get access to your airwaves?
415
MR.
BUCHKO: Absolutely. As I said in my opening statement, we
dedicate more of our commercial time and more resources both financially and
promotionally than anyone else in the city, be it any medium. The new FM station will be as committed to
this community as CJOB and Power 97 is.
It's just an extension. It will
become really an extension. If we're
doing a major fundraiser for the Children's Hospital Foundation, their annual
appeal ‑‑ and we're doing it on two stations right now ‑‑
we would obviously add an third and create a PSA campaign, create interviews,
and the new FM station would allow for more interviews and more coverage.
416
COMMISSIONER
CARDOZO: Okay, thanks. If I could just move to the economic and
business issues, and first ‑‑ this goes partially to what
Mr. Yerxa was talking about in terms of the selection of format ‑‑
you're looking at an oldies, soft A/C format.
Just tell me in a few words how that differs from say easy listening or
smooth jazz?
417
MR.
BUCHKO: I'll ask John Yerxa to answer
that question for you.
418
MR. YERXA: Perhaps the best way to discuss how it
differentiates from easy listening today is to begin by saying that easy
listening as such, does not necessarily exist in most markets across this
country. That is what we've been able
to identify in most of our research.
Unfortunately, many soft A/C stations have over-contemporised and have
moved to a more up-tempo stance and as a result have alienated a large
percentage of the 35-to-64, in particular 45‑to‑64 listeners out
there.
419
To the extent
that this station would be differentiated from what are now termed contemporary
soft A/C or mainstream A/Cs, we would put much greater emphasis on a large
percentage of music that we feel a lot of these stations have walked away from,
from the '60s and '70s in particular, and we would focus primarily on those
current artists who have a large amount of gold repertoire to call on.
420
COMMISSIONER
CARDOZO: Okay, and how does it differ
from the CHR rhythm?
421
MR. YERXA: I'm sorry?
422
COMMISSIONER
CARDOZO: How does it differ from CHR
Rhythm?
423
MR. YERXA: Right now, when you look at the CHR or hot
A/C formats, a very large percentage of the music that appears on those charts
is rock crossover material or R&B crossover material from the other
formats. There is as a result a greater
percentage of up-tempo music that is now appearing. There's also a significant percentage of country crossover
material that's crossing over on to the mainstream A/C charts as well. But primarily it has to do with a question
of tempo and it has to do with an opportunity to provide a block of music that
is not currently being provided to these more mature listeners.
424
COMMISSIONER CARDOZO: If you were licensed, how long would it take
to get the station going? For example,
if we had a decision out in May, when would you be launching if you were
licensed?
425
MR.
BUCHKO: I would hope three months, but
I would say six months would be a more feasible time period.
426
COMMISSIONER
CARDOZO: And is there any time of year
which is better to start operation? Is it he fall?
427
MR.
BUCHKO: I would say the summer would be
the best time, so you can be ready for the fall book. If you're not on during the fall BBM then you have to wait
another six months before you get rated.
And obviously it's a critical period if you have to wait six months
before you can actually show how well your station is doing. If there's a lag effect, that will end up
costing us some money in the end.
428
COMMISSIONER
CARDOZO: Okay. Can I ask you about your
financial projections? Under revenue,
you've got a category called "Other."
You've got local ads, national ads and other. What would the other be?
429
MR.
BUCHKO: I know, but I'll ask Jennifer
Holland, the financial person for Winnipeg, to answer.
430
MS.
HOLLAND: In our other revenue
projections we have things included there like remote production revenue,
studio production time, promotional fees and Internet revenues.
431
COMMISSIONER
CARDOZO: Other production time would be
when you rent out your facilities to others?
432
MS.
HOLLAND: Correct.
433
COMMISSIONER
CARDOZO: How do you project your ad
revenues over this period of time? I'm
thinking about the projections for Corus overall. Based, I think, on figures put out by your company, there was an
article in the Globe and Mail on Friday, which talked about the Corus overall
ad revenues projected to go up by two to three percent, with local ads going up
seven, national going down eight percent.
What's your sense about the Winnipeg markets in that context?
434
MR. HAYES: Our sense about Winnipeg is that it's a
very, very strong market. In fact, I
want to say that this year the market has increased ‑‑ local
market is up by twenty percent' is that right? -- in the first
quarter. Retail continues to be very
strong. It's clear that if there is a
recession on, Winnipeg hasn't heard about it.
People continue to buy large, durable items and make investments and
seek to purchase other goods and services.
435
So we feel very
good about Winnipeg. We think it's got
a very strong local economy.
436
COMMISSIONER
CARDOZO: Okay, because some of the
projections we've been looking at are a bit different and, unfortunately, not
as rosy. The Conference Board of
Canada, for example, since last fall has revised its projections downward. Some have said in the past that this is one
of the tightest radio markets. I think
you and others today have talked about a very competitive market.
437
MR. HAYES: I would refer to what Gary Miles said this
morning about Winnipeg and the fact that radio in general is becoming more and
more accepted as an advertising medium by local retailers. In fact, we find -- this should be no great
revelation, but we find that the better we train our sellers, the more
effective we are at garnering revenue, and therefore the more effective radio
advertising becomes. Because once an
advertiser is exposed to radio and learns how terrific it really is and how it
generates results, they come back again and again and again.
438
The other area
that we seek to cultivate, if you will, is the newspaper area where there's an
inordinate amount of advertising in markets like Winnipeg that rest with the
newspaper and we think that radio has a good and compelling story to wrest some
of that money away.
439
COMMISSIONER
CARDOZO: Okay, there's quite an
interesting stability in Winnipeg and that's a fairly diverse economy. Yet a certain amount of it, a good portion
of it, is based on exports to the U.S.
If you look at something like the current concern around MCI, Motor
Coach Industries, if they were to leave town, that's 13,000 jobs that could go
and then all the spin-offs that would be affected.
440
You're not
concerned about that type of situation?
441
MR. HAYES: I should let Garth speak to that, but I
think conjecture about a lot of what‑ifs, I don't know how to respond to
that kind of conjecture.
442
MR.
BUCHKO: I'm a born and raised
Winnipegger. I've been selling and involved
in management in Winnipeg for twenty years.
In fact, if it wasn't for Gary Miles, I probably wouldn't be here today,
so . . . And I worked
with Gary back in those days when he was at CKRC when the market was
challenging, and for many years Winnipeg revenue market didn't grow.
443
I think that
was our own fault. I believe now, the
last three years the Winnipeg revenue has grown. The last 52 weeks, Winnipeg revenue has grown by seven percent. Since September 1st when the so called
recession hit and after 9/11, every other market dropped in revenue. Since September 1st, the Winnipeg market has
grown altogether by 13 percent, which is significant.
444
I just think
we're doing it better. Our salespeople,
my salespeople are doing a better job the last couple, three years. They're better trained. And Gary Miles said the same thing. We're better equipped to grow the market. We've now got away from selling commercials
and spots. We have now become
salespeople who care about selling cars, computers and jeans.
445
That's why
we're growing the revenue. And that's
why the market growth is going to be substantial. I believe in our financial reporting we said in year two we'll
grow by four percent, which is very reasonable. In years three to six, we've said ten percent and by year seven,
12 percent. That's a combination of
ratings growth and market growth and by taking dollars from competitive mediums
too.
446
COMMISSIONER
CARDOZO: I'm assuming, Mr. Hayes, that
the notion of what-ifs is something that one does take into consideration in
economic projections and that you look at various scenarios on a sort of
running basis as you're looking at how the economy of a country or city is
doing.
447
MR. HAYES: Yes.
448
COMMISSIONER
CARDOZO: Can I ask a couple of questions
about share, the tuning share of the market.
What are your projections for the first five years?
449
MR.
BUCHKO: The tuning share will be
between seven and ‑‑ about seven to eight share for the new FM
station.
450
COMMISSIONER
CARDOZO: And how much of this share
would come from other stations, such as CJOB, CKY as well as Winker and
Steinback?
451
MR.
BUCHKO: Well, obviously our first,
probably our biggest competitor will be our own station, the 35 to -- CJOB is
comprised, 58 percent of its audience is 35 to 64. I believe we're better equipped to attack ourselves than somebody
else because if somebody else attacked us in that way, with the same type of
format, four or five years from now CJOB's financial credibility will be in
question.
452
But the key
with growing it is not only share, but the 35-to-64 year old demographic from a
revenue point of view is truly underserved in the Winnipeg market. About 70 percent of all media buys done in
Winnipeg is adults 25 to 54. When you look at CJOB's overall share of 18.5, it
looks large. But when you break it down
to 25-54 where all the money is being spent -- 70 percent of the money -- you
take our cluster versus somebody else's cluster, we are in the middle of the
pack or second in the pack for 25-54.
453
In the end, we
will attack CJOB's audience but at least we'll share the audience. We will affect CKY-AM too. We will affect all audiences. But heard earlier, there's nobody that's
really targeting 35-to-64 anymore, besides CJOB. We're the only ones who recognize that the population is growing
older, that the money that they have to spend is significant, and every FM
station in this city wants young 18-to-49 year olds, period. Even the new applications today will be all
young targeted radio stations.
454
If I'm going to
lose audience, and Corus is going to lose audience because somebody is
attacking the upper end of our station, I want to attack myself.
455
COMMISSIONER
CARDOZO: Okay. On the competitiveness issues, one of the
points that you've made is that you need a new station to be competitive in the
market and you talked about CHUM and Standard for example. I just want to point out a couple of other
things and ask you how relevant it is.
When you look at Corus overall ‑‑ which, according to
our 2001 Broadcasting Policy Monitoring report, you're the number one operator
in the country. You're an affiliate of Shaw Communications. Your combined tuning in the Winnipeg market
is pretty strong ‑‑ are you guys crying wolf?
456
MR. HAYES: I don't think so as it relates to the
dynamics of AM and FM listeners. I
mean, clearly, AM is a declining medium.
And clearly, it takes an awful lot of hard work and research and expense
to provide the kind of programming that CJOB provides.
457
We know, for
example, across Canada that the average profit margin per station is 20
percent. We know at our own news talk
stations across Canada that the average profit margin is in the 10 to 15
percent range as of last year. These
are statistics that worry us. Most
stations have the same amount of inventory to sell. News talk may have a few more veils than a music-driven service,
but in a marketplace that seeks to create a business out of selling ads, it's
not only the amount of listeners you have but the amount of inventory you have
available to sell.
458
In a market
like Winnipeg, if we have two stations and competitors have three, for example,
we are at an inventory disadvantage, and so the notion that we could provide
strong, compelling programming that serves the market that really doesn't take
listeners from another service but provides us with more inventory ourselves,
to provide to our well trained sellers to sell, this strikes us as being a
fairly compelling argument.
459
COMMISSIONER
CARDOZO: Okay. In your application, in one of the
supplementary briefs, you've given some pretty extensive detail about Corus as
a company and the success in the area.
There is a certain amount of restructuring taking place or has taken
place in Corus. I take it Corus is
keeping radio for the long term?
460
MR. HAYES: Yes.
One of the things that we've done is that, as I noted in my opening
remarks, Corus is really a compilation of a number of acquisitions that were
made in the last two years and we've acquired stations that were owned and
operated by some terrific operators around the company including the WIC
stations which, CJKR and CJOB were a part of.
461
We have a very
strong belief in radio as a local medium.
We have a very strong belief that local cluster radio managers should
be, not only required, but encouraged constantly to operate their stations in
the public interest.
462
In fact, if
there are five objectives that our company has on an on-going basis, community
service is right at the top of the list, and community involvement and community
knowledge.
463
That's why
Garth is the local market expert and the person on our team who is driving this
presentation today.
464
COMMISSIONER
CARDOZO: What are the synergies that
you anticipate between a new station and your existing stations?
465
MR. BUCHKO: I think the major, number one synergy would
be the sharing of the news stories that most FM stations wouldn't get, and most
radio stations wouldn't get. We are in
constant contact with every hockey player, football player in the city on a
daily basis. So those type of
interviews.
466
We have
reporters who cover the leg[islature], cover city hall, cover stories that, as
an FM station, we wouldn't have two or three beat reporters. But when they have an exclusive interview with
someone of notoriety, we're going to use that on our new FM station similar to
what we do on Power 97 right now. We
use the interviews and we use the clips in with the digital world of
technology. It's easy to pull it down
and use it.
467
But really, that's
it. We're going to have our own
separate programming department. We
will have 11 people who are fully dedicated to programming news on our new FM
station. CJOB has 23 people who are dedicated to gathering news and the
programming of its news services. So
together we will have a large news gathering operation between the two
stations.
468
COMMISSIONER
CARDOZO: That sort of raises the issue,
the question in my mind about the matter of radio clusters that Mr. Hayes
mentioned, and forgive me if you find my question to be aggressive. Really, what we're doing here is to try and
tease out all the issues and to try and get you to put as much information on
the record. I hope you don't feel I'm
coming after you.
469
But assure me
that this isn't that you are not more concerned about a radio cluster where you
will have these shared services, and of course synergies are useful and good
and make economic sense. Would the
listener have to listen to all three stations in order to get that
package? Are you not looking at this
simply as three stations in which to get out a certain amount of music and news
and share that kind of stuff?
Differently, or the flip side of it, would it make any difference which
of your three stations you're listening to in order to get the basic of what
you're putting out there?
470
MR. HAYES: First of all, these would be ‑‑
the resulting cluster, if you will, would be three distinctive formats aimed at
three distinctive audiences. There's a
news talk audience that would be satisfied by CJOB, which is pretty much 100
percent speech programming. Then
there's CJKR Power, which is oriented towards an 18-to-34 male audience. Then this station, which is oriented toward
a 35-to-64 year old.
471
If we are to
succeed as a business, we have to make sure that we reach and satisfy the
interests of those distinctive audiences, and therefore, to think that we could
just take elements from CJKR, for example, the male-oriented rock station, and
plug it in on the soft A/C, the full service format, we would get no ratings
traction. We would have no traction as
a business. It would not serve our
interests very well. And it would not
serve our interests well because it wouldn't be serving the interests of the
audience or the community.
472
As Garth
pointed out in his opening remarks, this station, this new station would
require us to make a substantial increase in the number of employees in our
operations here in Winnipeg. And we're
prepared to do that. This is clearly
not the kind of format that's music intensive, that you can just plug in and
hope that it works. This will require
on-air talent and news people and reporters and such who are able to talk on
the radio. And you have to be very
skilled to do that, and you need back-up support.
473
This is an expensive
proposition for us.
474
COMMISSIONER
CARDOZO: And on the matter of
increasing the number of employees, and looking back at the section you had in
your application about Corus overall, there have been significant layoffs in
recent months. How has that affected
radio and is the increase of the new station a completely different issue?
475
MR HAYES: Yes, it is a completely different
issue. Corus, like many other
companies, has taken on a great amount of acquisitions following the change of
rules as to ownership. In most cases,
in most major markets throughout Canada, we have never focused on creating
efficiencies or synergies within the clusters.
We were just trying to assimilate the cultures and figure out how the
business would work now that we've sort of integrated two AMs and two FMs or
one AM from buyer A and an FM from buyer B and an AM/FM from seller C.
476
And we focused
on that this last fall. I think it was
well publicized and well characterized throughout the press as a layoff. But it was due. In order to operate the business in an efficient way, we found
ourselves in many of the radio clusters -- Winnipeg was not one of them -- but
in many of the radio clusters, we found ourselves simply with three people
doing the same job.
477
MR.
BUCHKO: Commissioner, just to further
that point. I'd like to have it be
noted that in Winnipeg when all the Corus restructuring took place, we had zero
layoffs and we let zero people go.
478
COMMISSIONER
CARDOZO: Can I ask you one more question
about the Winnipeg market. Is it your
sense that we could license more than one ‑‑ assuming we
license, say, you ‑‑ could you operate with more than one
other new FM licence in the market?
479
MR. HAYES: The Corus radio view is that more competition
is better and that radio is such a powerful medium that it can best serve the
marketplace when there are more voices.
480
COMMISSIONER
CARDOZO: There are seven
applications. Are you saying wewe can
license all seven and it would be okay?
481
MR. HAYES: Do you have the spectrum for that?
482
COMMISSIONER
CARDOZO: Your application for 99.1 is
competitive with the Global and Rogers applications. From a technical perspective, not looking at the format and all
the other good stuff that you've talked about that you would do, from a
technical perspective, why is yours best for that frequency and not the
others? Just tell me about your part.
483
MR.
BUCHKO: Well, we have no engineers up
here so I'll keep it as simple as possible for even me to understand. Quite honestly, we haven't reviewed the
other frequencies. We would be
approachable, we would be in a position to take another frequency, as long as
another frequency had similar power and gave us the same kind of strength and
range.
484
But in the end,
we only looked at the one dial position and frequency.
485
COMMISSIONER
CARDOZO: Okay. I had a couple of other questions on that
but you just told me your answers. You
hadn't looked at the others.
486
Well, tell me
overall then, looking at what you've suggested, I'm wondering if a great deal
of your application comes down to a statement on page 8 of Schedule 20 where
you say that the reason you want this frequency is "to ensure that our stations
remain competitive. It is important
that we be permitted to operate two FM stations as well."
487
I understand
that from your perspective and the business case ‑‑ and we
talked about that a few minutes and you gave me a clear answer on that. From the perspective of the consumer, of the
listening public in Winnipeg, what's in it for them?
488
MR.
BUCHKO: As John Yerxa pointed out
earlier, there is a dire need for the 35-to-64, in fact the 45-plus audience,
to find a music home on FM. Through our
research I think we've clearly demonstrated that not only music is important,
but a full service radio station with news, sports, traffic, weather, lifestyle
programming and talk programming is important to that 35-plus, 45-plus
audience.
489
From a market
strength position, we are strong in Winnipeg.
The share numbers don't deny it.
When it comes to revenue strength, CJOB is the number two billing
station in Winnipeg. The CHUM station
is the number one billing station in Winnipeg.
CHUM has another FM station from Standard coming in. They're going to improve it, I think. And Standard's acquisition of Craig stations
-- they're going to improve those stations somewhat, some way. They're all, in the big picture,
under-performing, I think, their new owners would suggest.
490
So it's our opinion
that any good operator is going to look at changing those three FMs to attack
who they might think might be the weakest or where the biggest hole is. I have a pretty good feeling that none of
them will attack the 35-64 demo, the upper end, because everybody in Winnipeg
seems to want the 18-to-49 year old.
That's what they're slanted for.
Everybody wants it. We've
identified that there's an opportunity -- not only through research that
there's a need, that there's a good financial opportunity there.
491
COMMISSIONER
CARDOZO: I thank you for that because
at the end of the day, we are looking at the economic issues that you've talked
about but we also have to look at the public interest and the
what's-in-it-for-the consumer part of it, so thanks for that.
492
Those are my
questions. I appreciate your help. Thank you, Madam Chair.
493
THE
CHAIRPERSON: Thank you Commissioner
Cardozo, I have a few questions and I wanted to clarify a few things because I
did read your application.
494
Looking at the
benefits, I didn't see any reference to Winnipeg and Manitoba artists, and of
course I was concerned about that. So
is it fair to say that if we're talking in your CTD about funding an annual
talent search, it's a talent search of Manitoba artists?
495
MS. JOHNSTON: Yes.
496
THE
CHAIRPERSON: And you would agree to
that being in your, if we licensed you?
497
MS
JOHNSTON: Absolutely.
498
THE
CHAIRPERSON: The same with the
concerts. They would be in Winnipeg?
499
MS.
JOHNSTON: Yes.
500
THE
CHAIRPERSON: Of Manitoba artists?
501
MS.
JOHNSTON: Yes.
502
THE
CHAIRPERSON: Now, would they, the
concerts, also be related to your genre?
To the format?
503
MS.
JOHNSTON: Yes.
504
THE
CHAIRPERSON: The soft adult
contemporary artists? Then, when I'm
getting to the Canada Music Week, I take it that that has no connection with
Manitoba or Winnipeg artists?
505
MS.
McNAIR: No. But as you know, Canada Music Week, musicians from all over
Canada go, but the cheque would be paid to Canada Music Week.
506
THE
CHAIRPERSON: I also know that musicians
from the Prairies are under-represented which is why I look for every
opportunity to promote them and if I'm going to have a licence in Winnipeg, I'd
like them to promote the under-represented people.
507
Same with
FACTOR, are you going to be requesting that those monies would be dedicated to
Manitoba or Winnipeg artists?
508
MS.
McNAIR: Yes, we would encourage FACTOR
to allocate those funds to Manitoba artists.
509
THE
CHAIRPERSON: You've asked and they can
confirm that it would be? You would do
that?
510
MS.
McNAIR: I know in the past we've asked
FACTOR to do that. I don't know if they
absolutely confirm.
511
THE
CHAIRPERSON: They actually give a
letter.
512
MS.
McNAIR: Okay.
513
THE
CHAIRPERSON: And is it your intention,
Mr. Buchko to continue providing the Blue Bomber feed to NCI?
514
MR.
BUCHKO: Absolutely, for as long as they
want it.
515
THE
CHAIRPERSON: At no cost?
516
MR.
BUCHKO: At no cost. In fact, when the transmitter in Brandon is
up and running this fall ‑‑ or this spring, I guess, let's
hope by May or June ‑‑ the Brandon area, which has always been
a hole for us in the Manitoba market, because there's no Brandon radio stations
who carry Bomber coverage, we will have almost 100 percent penetration of the
province with Blue Bomber football, and in fact, into Saskatchewan.
517
THE
CHAIRPERSON: NCI, I think, will have 95
percent coverage, if I understand that correctly.
518
When we get
into the ‑‑ back at the benefits, at another hearing where
Commissioner Cardozo and I were, we were told that the complication CDs, while
a wonderful thing, really don't help a young artist, that it's an issue of
rotation. If you have a medium rotation
or ‑‑ that is how the young artists actually get ahead in
life. So that's why you got the
questions from Commissioner Cardozo about the efficacy about a CD
compilation.
519
What are your
plans with the compilation, if you had the new station here and the other two,
in terms of rotation?
520
MR.
BUCHKO: Well, I guess if we decide that
ten songs are the best that we have available, they should be airable. We're not going to put six that are and four
that aren't. So on a local basis, they
will receive significant airplay. I
don't know if you're looking for a number or figure.
521
THE CHAIRPERSON: I'm looking for a type of rotation, yes.
522
MR.
BUCHKO: Boy, I wish I had a programming
guy up here --
523
THE
CHAIRPERSON: Medium is about 14 a week.
524
MR.
BUCHKO: I know I can't give you --
525
THE
CHAIRPERSON: Maybe you could come back
with that?
526
MR.
BUCHKO: We will come back with a
definite number before this proceeding is over. A And the other Corus
stations and the other stations across the country who are soft A/C, we will do
everything and we will produce the CD and distribute it.
527
THE CHAIRPERSON: I didn't understand what you were talking
about, Mr. Buchko, the last 52 weeks, the market has gone up seven
percent. Is that your knowledge of the
advertising market, or what?
528
MR.
BUCHKO: That's from the TRAM
reports. The last 52 weeks, to the end
of December, the market has gone up seven percent. From September 1st, it's gone up 13 percent this fiscal.
529
THE
CHAIRPERSON: To the end of December?
530
MR.
BUCHKO: Yes.
531
THE
CHAIRPERSON: Okay. And having heard a lot of radio applications
in the recent years, I was always told that my demographic, which is from 35 to
65 -- and certainly I'm in the younger part of it -- that we are not a good
demographic because if we have money, we don't spend it and that le are
primarily savers. Now, if you go for
smooth jazz, you get the high-end people who have the Lexuses. But for the rest of us, we're not a good
demographic and that's why you go for the kids who, if they have money, they'll
spend it, and if they don't, they'll get it from their parents. What do you say, anybody on the panel, about
that?
532
MR. HAYES: I also reside in your demographic, also at
the younger end. I will tell you that
having operated stations in the U.S. and owned radio stations in the U.S. and
sold there in many major cities, for more years than I care to say, the
demographic of 25-to-54 adults, has been applied by major ad agencies as the
sweet spot, the target that they want to reach.
533
The younger
end, because it's a time when younger consumers are forming brand loyalties and
deciding on brands that they hope to stay with -- or that advertisers,
marketers hope they'll stay with for the rest of their life.
534
The older demo
is seen as a demo that's kind of made its brand loyalty decisions and has kind
of decided what products and services it will rest with. There is a huge movement in the U.S., and I
believe by extension in the international community, now that the demographics
of North America in general are changing towards this older demo, suddenly the
marketers themselves, in our age group, are saying, well, wait a minute, gee,
you know, I'm 55 now and I still need to know about automotive or financial
services or food products that are new and so on.
535
So I think that
this will begin to change over time.
However, in advertising, ever since I've been involved in this business,
youth is king. The crazy thing about
this is that it results in people in our demographic being underserved when it
comes to content.
536
MR.
BUCHKO: Madam Chair, I also, because
CJOB is such a 35-to-64 demo, I've spent the last year and a half with our
national rep company, Canadian Broadcast Sales, looking at ways to attack this
demo and growing the demo, and there's so many books written on the growth and
how the demo change is happening ‑‑ which is why I'm excited
about this new FM station. The revenue
growth that we're talking about is going to come from new areas because we're
getting better at understanding the next demo.
537
There's so much
business that's being spent in the newspaper that we're not getting because we
didn't know enough about it. So I can
tell you that from a national point of view, our national rep company is
working on mutual fund companies, on the Cadillacs, the Mercedes of the world,
who don't use radio. And we need to get
better at that.
538
THE
CHAIRPERSON: I wanted to talk about
your point, Mr. Hayes, about the inventory disadvantage and yet, if we license
you, don't we create another disadvantage?
Predicated on the applications and some approvals, your concern is that you
are headed up against somebody who has two FMs and one AM. And you want the ability to equalize the
inventory of advertising; is that correct?
539
MR HAYES: Yes, that's part of it.
540
THE
CHAIRPERSON: And yet, if we do that,
because talk has more availabilities, don't we create yet another inequality?
541
MR. HAYES: Well, it all comes down to the demographic
and the audience characteristics of a given station. CJOB has got a tremendous portion of its audience that's outside
of that 25-to-54 demographic. CJKR has
got a tremendous amount of its male demographics that are at the lower
end.
542
We're seeking,
I guess, some relief in inventory levels at the upper end of that 25-to-54 age
group in a demographic that is currently under-served for programming and by
extension, under-served in a music environment, by which advertisers can reach
their audiences.
543
THE
CHAIRPERSON: But if we use strictly
your inventory advantage/disadvantage, you would again be advantaged if we gave
you another FM, right?
544
MR. HAYES: Probably in terms of the gross amount of
inventory that would be applicable, but it does come down to audience
demographics.
545
A statistic
from last fall, as related to me from CBS, was that, 80 percent of the national
business in Canada on radio was placed against the adult 25-to-54 demographic.
546
What we're
seeking to do here with this format is to create a new market here in Winnipeg
for local audiences and by extension for local advertisers.
547
THE
CHAIRPERSON: All this talk about
differentiating yourself from CJOB in terms of news and coverage made me start
to think about how you're going to be different from Power in terms of news and
local coverage.
548
MR.
BUCHKO: We'll be night and day
different. The news readers on Power --
Power's a typical FM station. We do
news in the morning, as little as possible, and then we get on to music. On the drive home we do news once, we have
surveillances, traffic, on the street traffic, which is another advantage. Our new FM station will be -- there's no
commercial stations in Winnipeg that has on the street traffic updates, and in
Winnipeg on days like today, you need it.
Our new FM station will have that.
We share the resources with CJOB and Power. But there will be no duplication between Power and our new FM
station.
549
THE
CHAIRPERSON: And, Mr. Buchko, you did
talk, when discussing this with Commissioner Cardozo, about 11 staff and then I
don't know if it was you or Mr. Hayes who talked about our radio staff in
Winnipeg will increase significantly.
What does that mean?
550
MR.
BUCHKO: Our plan is to have 11 staff
who are in the news and programming side of the business. There will be dedicated news director,
program director and on-air people.
That's 11. Our plans are to have
between 18 and 22 full-time staff who are working for the new station. So that will be support people, sales
people, an operations person. So there
will be 18 to 22 people that will be working for the new FM station.
551
THE
CHAIRPERSON: So 18 to 22 incremental
positions, at least 11 of which will be totally dedicated to the FM?
552
MR.
BUCHKO: Yes.
553
THE
CHAIRPERSON: How many does that add up
to in terms of staff?
554
MR.
BUCHKO: Currently right now at CJOB and
Power 97, we have 65 full- and part-time people. About eight part-time, which is significantly more than any of
the radio station's combinations in Winnipeg.
555
Just to clarify
something, the 18 to 22 people will be solely dedicated to the new
station. They won't be -- the extra
people won't be --
556
THE
CHAIRPERSON: Won't be sharing technical
or --
557
MR.
BUCHKO: No. We'll have our own traffic person, for example, and that person
will be dedicated. We'll have to add
some accounting support for the station.
We'll have to add some creative people too. But when it comes to adding people, we hire effectively between
18 to 22 people.
558
THE
CHAIRPERSON: Mr. Hayes, how many other
markets does Corus have three stations, one being a talk station?
559
MR. HAYES: I'll have to add them up. We have talk stations in Vancouver. We have an all news station and a news talk
station in Vancouver, and Edmonton. We
have a news talk station in Calgary. We
have a news talk station in Winnipeg, obviously. In Toronto, we have a news talk station. In London and Hamilton, we have a news talk
station. In Montreal, we have all news
in French and all news in English.
560
THE
CHAIRPERSON: In Vancouver, you have the
AM and the two FMs?
561
MR. HAYES: In Vancouver we have two AMs and two FMs.
562
THE
CHAIRPERSON: In any of the other ones do
you have one AM and two FMs?
563
MR. HAYES: Yes, in Calgary.
564
THE
CHAIRPERSON: How many staff total do
you have?
565
MR. HAYES: I can't tell you.
566
THE
CHAIRPERSON: You can let us know?
567
MR. HAYES: Yes.
568
THE
CHAIRPERSON: Any other one where there
is two FMs and one AM?
569
MR. HAYES: That would be in Toronto, and I'll also have
to get back to you to you on that. I
think it's not inconsistent with the number here in Winnipeg although I need to
get back to you. I think it may be
higher.
570
THE CHAIRPERSON: Okay.
On the issue of frequencies, I do think we need an answer to if any of
the other frequencies would be acceptable, so you can come back to us in Phase
II or III with that. Can I have
somebody put the mike on and say yes?
571
MS.
McNAIR: Yes.
572
MR.
BUCHKO: I'm sorry, yes.
573
THE
CHAIRPERSON: Very interesting talking
about how lucrative some of us 35-plus people are and that we have no music
home, but at the end of the day, if this doesn't work out, we can't stop you
from changing your format anyway, can we?
574
MR.
BUCHKO: No, you can't, but we've done
all the research and there really isn't -- we're not interested in going after
another 18-to-34 station. There's, it's
duplicated. There is such heavy duplication
in the lower end of the demo that really, the truly under-served segment of the
population is 35‑64. Thirty-five
to 54s will make a lot of money, we have to be better at selling the 55-to-64,
but it's truly ‑‑ that's where there's an opportunity to grow
the market and to provide a full service FM station, which, that's the hole,
clearly.
575
THE
CHAIRPERSON: Thank you. Mr. McCallum.
576
LEGAL
COUNSEL: In coming back with your
undertaking, if at all possible, could you respond in Phase II then when you
come back. I think that would be
normally Wednesday. So if at all
possible.
577
MS.
McNAIR: In Phase IV? We don't plan to appear in Phase --
578
LEGAL
COUNSEL: Sorry, in Phase --
579
MS.
McNAIR: -- in Phase II. In Phase IV, at the end on Wednesday?
580
LEGAL
COUNSEL: It would even be better if you
can, just in Phase II, just provide the answers at that time, if at all
possible.
581
MS.
McNAIR: Okay.
582
LEGAL
COUNSEL: And, in looking at the
frequencies, perhaps what you could do is, you could have a look at what Rogers
filed earlier this morning because, if you look at the frequencies, all of them
would have qualifiers. In responding on
the frequencies, you said you would take another frequency if they were at a
similar power or a similar strength, I think was what you said. But if you look at all the frequencies that
are high power, according to what Rogers filed, all of them would have a
qualifier at the high power.
583
At the
low power, there's only one that does not have a qualifier, but even on that
it's a low power as opposed to high power.
So, perhaps in looking at the frequencies, you can look at what Rogers
filed.
584
MS.
McNAIR: We certainly will.
585
LEGAL
COUNSEL: In speaking of spoken word
programming you, I believe, said that 25 percent of the schedule could be
spoken word; is that correct?
586
MS.
McNAIR: Yes.
587
LEGAL
COUNSEL: If the Commission decided that
would be a condition of license, you would accept that?
588
MS.
McNAIR: Yes.
589
LEGAL
COUNSEL: In the market research that
was done, I think by Mr. Yerxa, I think the market research asked people in the
survey that were at least 35 years of age and below 64 years of age. Could you explain why the research was
limited to that target age group?
590
MR.
YERXA: Because in all of the research
that we've conducted over the last -- we began to notice it in the last five to
seven years, but in most of the research we've conducted across the country,
that is where we have noticed the greatest degree of disenchantment amongst
radio listeners and where we've been able to identify new holes and new
opportunities.
591
LEGAL
COUNSEL: I asked that in conjunction
with one of the other applicants for the 99.1 frequency. They did research of 84 to 64, so they
didn't limit the target to 35 to 64. So
again, I'm still trying to understand why it was limited at the outset.
592
MR.
YERXA: Once again, because our analysis
would reveal that that is, generally speaking, the most underserved
target. When you look at the BBM
statistics for this market and you look at the formats that are presently being
offered, all tend to skew younger than 40 years of age, whereas anything that
is offered in excess of 40 years of age tends to be primarily provided on the
AM dial.
593
LEGAL
COUNSEL: Again, just one further on
that, I note, for example, from the presentation this morning, you talked about
Power. You said the core demographic
for Power is men 18 to 34. And I just wondered, again, in respect of the
research, you could have, for example, targeted women 18 to 34 with the new
station if you'd wanted to, or you
could have done your research based on that demographic, and again, you chose
not to.
594
MR. HAYES: That's correct. Art and science kind of intersect in programming and when we
surveyed the market place based on our experience, based on the research that's
available to us through BBM, based on the research that's available to us
through what CJKR has compiled in the past, we concluded that this end of the
spectrum, demographic spectrum, was being over-served in Winnipeg, and made the
decision.
595
LEGAL
COUNSEL: You had concluded that, sorry,
before you -- in giving instructions to Mr. Yerxa concluded that before you
even gave him instructions; is that right?
596
MR. HAYES: That's my understanding. Is that right, Gary?
597
MR.
BUCHKO: Yes, it was, but all we did was
say survey the 35-to-64 year olds and ask them what they would like. We didn't guide them. We didn't ask them if they wanted new soft
A/C and news service and that type of thing.
Based on the dollars that are being spent in the marketplace against a
younger demo, we just knew that by going into a station that is going to go
after younger demographics, it wouldn't be viable. So we asked the question, based on the hole in the marketplace,
of the demographic hole, 35-to-64, what format would they like. What are they missing out and what type of
services are they missing out on the FM dial, and clearly they told us an
oldies, soft A/C with a large talk component to it.
598
LEGAL
COUNSEL: Thank you. Turning for a second to the lifestyle
magazine program, I take it that would be on from 9:00 to 11:00 p.m.?
599
MR.
BUCHKO: During the week, Monday through
Friday we will run a two-hour -- it will be a talk program that's hosted -- I
haven't decided yet, male or female -- but it will be hosted locally and it
will be targeted to women. Our research
for CJOB over the last many, many years -- and I think we're pretty good at
doing talk programming in Winnipeg -- has told us that there's a large
opportunity for a host of doing an evening talk show. So that will be Monday through Friday from 9:00 to 11:00 p.m.
600
LEGAL
COUNSEL: And there would be audience
participation in that?
601
MR.
BUCHKO: Absolutely. It will be open line. It will be similar yet different. On CJOB we tried to create a ‑‑
we have a parent talk show. We have
issues that are important to families.
And the FM station will only allow us to expand that to five days a week
on lifestyle issues and parenting issues and issues that are important to a
38-year-old mother.
602
LEGAL
COUNSEL: So do you have your own
guidelines on open-line programming, for example?
603
MR.
BUCHKO: Yes, we do.
604
LEGAL
COUNSEL: And those are developed for
other stations?
605
MR.
BUCHKO: We have guidelines that we have
internally and we have Corus guidelines for open-line programming. But we are stringent in sticking with our
guidelines in Winnipeg. And the
weekend, that's when we'll have the lifestyle magazine programming from 6:00
till 10:00 a.m.
606
LEGAL COUNSEL:
Sorry, did you say you already had guidelines in place right now?
607
MR.
BUCHKO: Yes, we do.
608
LEGAL
COUNSEL: For CJOB?
609
MR.
BUCHKO: Yes, we do.
610
LEGAL
COUNSEL: And they would be the same
guidelines for this?
611
MR.
BUCHKO: Absolutely.
612
LEGAL
COUNSEL: Thank you. Again, if this station were licensed, what
would you estimate would be the impact on CFWM-FM and CHIQ-FM?
613
MR.
BUCHKO: I'll let John Yerxa talk about
the research and how it will affect them.
614
MR. YERXA: An oldies-based, soft A/C radio station
would only have a marginal impact on the other A/C players in the market. This is primarily because of the two
stations that might fall under the A/C umbrella.
615
Q-94 would have
to be classified as hot A/C, if not adult CHR, as well over half of its core
listeners select CHR or rock as their favourite type of music.
616
And Magic 99
would have to be classified as mainstream A/C, considering that its play list
encompasses a large number of cross-over selections from CHR, rock and country,
while approximately one-quarter of its core listeners actually selects some
version of CHR or rock as their favourite type of music. And yet, only 27 percent of Magic's core
choose either soft A/C or one of the two Gold life groups as a favourite.
617
Consequently,
the impact on these two stations would be somewhat limited as this new
station's A/C repertoire would primarily encompass those artists who possess
significant Gold libraries and Gold repertoire would feature artists that A/C
radio has largely walked away from.
618
LEGAL
COUNSEL: Are you able to quantify your
answer in terms of possible market share or dollars?
619
MR. YERXA: Not at this point, knowing that we don't
know how the other stations would react upon sign-on.
620
LEGAL
COUNSEL: Thank you. Thank you, Madam Chair.
621
THE
CHAIRPERSON: Thank you Mr. Hayes, Mr.
Buchko and the rest of you. Thank you
very much.
622
We will now
take a break until two o'clock.
--- Upon recessing at 1230/ Suspension à 1230
--- Upon resuming at 1400/ Reprise à 1400
623
THE CHAIRPERSON: Mr. Secretary.
624
THE
SECRETARY: Thank you, Madam Chair. The next application is by Global
Communications Limited for a licence to operate an English language specialty
FM radio station in Winnipeg. The new
station would operate on frequency 99.1 MHz with an effective radiated power of
100,000 watts. Please begin when you're
ready.
625
MR. NOBLE: Thank you, Mr. Secretary. Good afternoon, Madam Chair, Commissioners
and Commission staff. My name is Gerry
Noble and I am the President and Chief Executive Officer of Global Television
Network.
626
In a moment,
I'll ask Charlotte Bell to introduce our panel. But first, I'd like to take a little time to tell you how our
entry into radio in Canada and our proposal for a Smooth Jazz radio station in
Winnipeg fits within our overall corporate strategy.
627
As you know, it
was in Winnipeg, through the start-up of CKND-TV, that CanWest Global laid down
the first building block for what has become a successful national television
network for Canadians. Approval of this
application represents for CanWest an opportunity to begin a new chapter, our
entry into radio in Canada. We already
operate a number of successful radio stations in one of the world's most
competitive radio markets, New Zealand.
The licensing of Smooth FM would allow us to expand our operations into
radio in Canada, and most importantly, into the city we call home, Winnipeg.
628
Our entry into
radio is integral to our development strategy, which recognizes the importance
of expanding our media offerings in order to compete in an increasingly
fragmented media environment.
629
As one of
Canada's leading diversified media companies, our strategy is focused on the
development, promotion and exhibition of content across a variety of
platforms. With your approval of this
application, this will now include radio.
630
Throughout
Canada we are deeply rooted in the communities we serve. In Winnipeg, where our corporate office is
based, CanWest has helped fund a number of cultural institutions, including the
CanWest Global Performing Arts Centre, which houses the Manitoba Theatre for
Young People. CanWest already has
strong ties to the local jazz scene in Winnipeg as a significant supporter of
the Jazz Winnipeg Festival through a variety of initiatives each year.
631
Beyond meeting
our corporate objectives, this application is also reflective of our Chairman,
I.H. Asper's personal commitment to Winnipeg's local jazz community and his
ongoing dedication to increase the exposure of local jazz artists.
632
For the past
several years, the CanWest Global Foundation has helped sponsor numerous jazz
concerts and events, providing a stage for local and other Canadian artists to
play alongside some of the world's best jazz performers.
633
This past
summer, at the Jazz Winnipeg Festival, CanWest sponsored the "Legends of the
Bandstand" featuring Hank Jones, Louis Hayes, Curtis Fuller and others. At previous festivals, CanWest has sponsored
performances by Dave Brubeck and Pat Metheny and Canadian jazz stars, the Holly
Cole Trio, Diana Krall and Marc Jordan, to name just a few.
634
The CanWest
Global Foundation is also the presenter of "An Evening of Manitoba Jazz" at the
Hotel Fort Garry where the CanWest Global Jazz Achievement Award is given each
year and a number of local jazz artists perform.
635
Approval of
this application will allow us to further support existing Canadian and
Winnipeg jazz artists, as well as help develop new emerging talent. This is why we have committed a substantial
amount of money to Canadian talent development, which we will discuss later in
our presentation.
636
Smooth FM will
also benefit from cross-promotional opportunities with CKND as well as our
digital jazz specialty service, Cool TV, which we hope to have launched some
time this year.
637
Commissioners,
our Executive Chairman, Mr. Asper, has often stated his goal of creating new
Canadian jazz stars. This application
is an important first step in meeting this goal. It will provide a new window for Canadian jazz talent on air and
a substantial investment in developing and promoting jazz talent, both here and
across the country and of course it will provide an exciting new listening
choice to Winnipeg radio listeners.
638
I would now
like to ask Charlotte to introduce our panel and field your questions.
639
MS. BELL: Thank you, Gerry. Commissioners, we are pleased to appear before you to present our
application for a smooth jazz radio station to serve Winnipeg.
640
With us today,
to my left, is Del Sexsmith. A Winnipeg
resident his entire life, Del has a long history of community involvement in
this city and has extensive background in the radio industry with more than 23
years of experience. Among other
things, Del has worked as program director for CJOB and operations manager for
both CJOB and CKIS-FM in Winnipeg. His
knowledge also extends to music. He is
actively involved in the local music scene and is also a jazz fan.
641
In the row
behind to my far left is our senior financial analyst, Katherine Browne, who
has appeared before the Commission many times before. Next to Katherine is Monte Graham, general manager of CKND‑TV,
and next to him is Lisa Best, CKND's entertainment on-air personality who will
also provide local cultural and entertainment reports for Smooth FM if we are
successful with this application.
642
At the side
table to my far right is David Oakes, president of Oakes Research, who
conducted our format and demand survey.
Sitting next to David is Ken Goldstein, a well known broadcast economist
and CanWest's chief strategy officer.
Finally, next to Ken is Jim Moltner, of Imagineering, our technical
engineer.
643
In the
audience, we also have with us today, representing the Asper family, Gail
Asper, a director on the board of CanWest Global Communications Corp., our
parent company. Gail is also very
active in the Winnipeg cultural community.
644
This
application fully responds to the Commission's selection criteria for licensing
new radio stations. Smooth FM will be a
quality service providing a high level of diversity to the marketplace. Smooth FM will provide significant exposure
for Canadian jazz artists. Smooth FM
will provide a new reflection of the local cultural scene. Smooth FM will also make a significant
contribution to Canadian talent development, and it will do all this while
having a minimal impact on incumbents.
645
We began this
exercise by asking Oakes Research to survey Winnipeg residents in order to
assess their musical interests and tastes.
The research clearly told us that there was demand for a smooth jazz
radio station in this market. The
presence of a vibrant jazz community will ensure that we reach our reasonable
market share projection of 5 percent for year one.
646
We've proposed
the highest program spending of any applicant before you. We've proposed a specialty music format that
will devote 70 percent of its entire schedule to a mix of traditional and
smooth jazz. With the exception of a
few hours per week being devoted to jazz on existing stations, this format is
not represented in this market.
647
Our Canadian
content levels surpass Commission
regulatory requirements. Smooth FM will
devote 35 percent of its music to Canadian content even though regulations
require a 10 percent level for Category 3.
648
Finally, our
comprehensive Canadian talent development proposal will direct $2.5 million
over the period of the licence to local and national jazz artists. Del.
649
MR.
SEXSMITH: Thank you. Commissioners, smooth jazz is one of the
fastest growing radio formats in North America. Since its inception in Los Angeles in the mid-'80s, it has gained
momentum to the point that it is recognized as a distinct format on radio
industry charts such as R&R and Billboard.
650
As you will
hear from the testimonials on our video, there is a vibrant jazz community
waiting to break out in both Winnipeg and across Canada, including traditional
and more contemporary jazz artists emerging in every part of the country. Jazz has gained momentum in the past few
years with record sales and concert attendance increasing every year. Now, 17 Canadian cities hold jazz festivals
attracting almost four million people each year.
651
Our proposal is
tailor-made to meet the tastes of Winnipeg jazz lovers with its blend of smooth
jazz and other jazz styles. This hybrid
approach will satisfy the interest of existing jazz lovers while introducing
others to this music form.
652
To help our
audience understand and appreciate the music, we will schedule special features
throughout the day and block programs through the schedule providing our
audiences with the great sounds of jazz as well as background information about
the music and artists they hear.
653
Research shows
that our target demographic tends to appreciate news, information on business
and cultural events. We will provide
comprehensive news packages each day in addition to regular business news and
local cultural and entertainment features.
Lisa.
654
MS. BEST: Thank you.
Winnipeg prides itself in being a jewel in the belly button of
Canada. Smooth FM will add another
facet to this gem on the prairies. As a
reporter working the entertainment scene on a daily basis in Winnipeg, the most
obvious difference between radio and television is about 60 pounds of
gear. Radio is a more accessible
medium, not only for listeners but for those reporting it as well.
655
The opportunity
and ability to cover events greatly increases with radio. With a focus on local entertainment,
specifically the jazz and smooth jazz scene, Smooth FM's daily entertainment coverage
of events would include a list of jazz events and upcoming events in the
province and Winnipeg under the banner of "Jazz du Jour." In keeping with CanWest Global's commitment
to nurture local jazz artists, whether established or not, Smooth FM will
present special features like "Smooth Operators." The focus will be on newcomers local and national, with a special
emphasis on local jazz prodigies.
656
Smooth FM will
offer us the opportunity to cover live jazz events at a variety of Winnipeg
venues, including the Sheraton Downtown, the Mardi Gras Jazz Café and the West
End Cultural Centre.
657
Smooth FM's
commitment to the genre of music currently not given enough exposure in
Winnipeg will also provide a boost to the local concert scene and live music
venues.
658
Kevin Donnelly,
the former VP of House of Blues Concerts in Vancouver, who is now with Winnipeg
Enterprises, told me he believes the pre-promotion of jazz and smooth jazz
musicians and their music on Smooth FM will entice more well known artists to bring
their concerts to our city.
659
MS. BELL: We'd now like to show you a short video
presentation to give you an idea of what the service might sound like.
660
(VIDEO
PRESENTATION)
661
MS. BELL: We're ready to answer your questions.
662
THE
CHAIRPERSON: Thank you. Commissioner Williams.
663
COMMISSIONER
WILLIAMS: When I got off the plane last
night someone said, "Welcome to Winterpeg," but I'm intrigued to learn that it
is now known as the jewel in the belly button of Canada.
664
I'm going to
cover the same general area of questioning that the other Commissioners have
done earlier today and I'm going to begin in the area of contribution to talent
development.
665
As part of the
annual contest for new jazz talent called Project Smooth, you specified as
direct expense an amount of $8,000 for promotion of the contest consisting of
artwork, newspaper advertisements and fliers.
In Public Notice 1990-11, the Commission indicated that it considers the
expenses related to the promotion of a contest as indirect. Your annual budget could therefore be
decreased by this amount of $8,000 if the Commission were to decide that these
expenses should be considered as indirect.
666
How would this
amount be redirected to acceptable CTD initiatives?
667
MS. BELL: It would be redirected either in adding
another CD or additional funds in creating the two CDs. We've, as you know, given $10,000 to each of
the artists. As you know, you can
create a CD for $3,000 or $30,000, so I think that that's where we would reallocate
those funds.
668
COMMISSIONER
WILLIAMS: Okay. Thank you.
For the first five years of the licence term, $200,000 will be directed
to FACTOR. Half of this amount,
$100,000, will be devoted to Winnipeg and other Manitoba artists and the
remaining will be available to Canadian artists elsewhere in the country. At least half of the $200,000 will go to
support smooth jazz artists. Do you
have an agreement with FACTOR to that effect?
669
MS. BELL: Yes, we've had discussions with FACTOR and
I'd just like to make one clarification.
I had a long discussion with Heather Ostertag, who runs FACTOR, and
discussed with her our plan. She was
thrilled and agreed immediately that yes, in fact, half of those funds would be
dedicated to Manitoba and Winnipeg jazz.
And then when I mentioned a further split of 50 percent, she said, "You
know, you'd be micro-managing these funds."
She said the money will be spent as you ask, there will be money spent
on smooth jazz and more mainstream types of jazz. But she recommended that we not further split how the money would
be allocated.
670
COMMISSIONER
WILLIAMS: How do you plan on
distributing the amount of $67,000 and $73,000 the sixth and seventh year of
the licence term?
671
MS. BELL: You're referring to the amounts, the 10 percent
of -- I'm sorry, those amounts are the amounts that would be going to FACTOR in
the last two years?
672
COMMISSIONER
WILLIAMS: Yes, in years six and seven.
673
MS. BELL: The same thing basically, 50 percent would
be going to Winnipeg or Manitoba jazz and the other 50 percent across Canada.
674
COMMISSIONER
WILLIAMS: Now, you are further
proposing to spend $80,000 annually for two distinct initiatives, the Jazz
Winnipeg Festival and the Asper Foundation Jazz Performance Series. Is the Asper Foundation Jazz Performance
Series to take place during the Jazz Winnipeg Festival in June and could you
tell us a bit maybe about both of the events?
675
MS. BELL: The Asper jazz series does not take place
during the festival. I think those
concerts take place elsewhere during the year in the wintertime. I believe there is one coming up very close
to now actually.
676
COMMISSIONER
WILLIAMS: And can you tell us a bit
about each of the events?
677
MS. BELL: Are you referring to just an explanation of
--
678
COMMISSIONER
WILLIAMS: Just a quick overview of the
jazz festival and then how the Asper Foundation Jazz Performance Series is
different from it.
679
MS. BELL: I'll just have Gerry to --
680
MR. NOBLE: Being a Winnipeg resident for some years,
I've experienced both of those. And the
Winnipeg Jazz Festival -- the Jazz Winnipeg Festival is an event that occurs
over the period of the summer which is when all the jazz performers come to
town and perform at various locations, and CanWest Global sponsors that and
this project will also sponsor that.
It's a fairly intense festival.
681
The Asper Jazz
Series is a series of concerts throughout the year that the Asper family
sponsors. They bring in a special
performer and book a hall, so it's not specifically associated with the festival
itself. It's separate. It's something the Aspers do to help
Canadian jazz artists and help bring world renowned jazz to Winnipeg.
682
So they're
separate and distinct. Both of those
will be supported by our Smooth FM application.
683
COMMISSIONER
WILLIAMS: Thank you. You provided a breakdown of the proposed
direct expenses: $8,000 would be
allocated to musicians fees for the Asper series, $24,000 would pay the
physical cost to stage for six concerts and $48,000 would be dedicated to
musicians' fees for four performances, smooth and other jazz. Could you tell us a bit about and elaborate
on the proposed budget for each of the two projects?
684
MS. BELL: In terms of the Asper series, that
allocation of $8,000 is just for those concerts. In terms of the remainder, which is $72,000, that would be
allocated through the Jazz Festival.
685
COMMISSIONER
WILLIAMS: Okay. Regarding the University of Manitoba Jazz
Camp, can you please explain the criteria that will be used to select the
recipients of the $10,000 bursaries, the four of them and I guess possibly --
and how the station will ensure that this selection is made accordingly?
686
MS. BELL: We actually ‑‑ we've had
discussions with representatives from the University of Manitoba. We have not actually set out criteria
although we are going to be working with them, and we would want a
representative from the station to sit on their panel of judges in order to
ensure that the money is being spent as we directed.
687
COMISSIONER
WILLIAMS: Okay. I guess this question is to start a
discussion on the integrity of smooth jazz format. You indicated in your application that you plan to include strong
elements of other forms of jazz other than smooth jazz. The existing stations are usually
broadcasting musical selections that are related to the main format. Listeners expect to hear selections falling
under a category of music promoted by the station. Won't you be worried that a different type of jazz other than
smooth jazz selections may be confusing or unappealing to your audience?
688
MS. BELL: No, we actually believe that we can blend
the two. The station will be primarily
a smooth jazz station. I would say
about 75 percent of the programming ‑‑ or the musical
selections; it's my TV background ‑‑ about 75 percent of the
music would be from the smooth jazz category.
But we also think that there's a real appetite for this audience to hear
some of the more mainstream jazz, and this is basically about building bridges,
not walls, and we think that by bringing the two together and providing a
hybrid formula, this will widen the audience to smooth jazz and to mainstream
and provide something for both fans. I
don't know if Del has anything to add to that.
689
MR.
SEXSMITH: I just wanted to comment that
our play list which will be primarily from the smooth jazz offerings, will be
reflecting a very current series of releases.
So the charts we talked about in the presentation, they detail Tony
James, Diana Krall, a whole list of artists both Canadian and non-Canadian,
Jane Monhite and so forth, that can be heard and appreciated in context with
more traditional mainstream jazz such as Miles Davis, John Coltrane and so
forth.
690
So our
intention, while staying with the more current selections, which are deemed to
be smooth jazz clearly on all the charts, we feel that the audience here would
appreciate and would welcome some more traditional and mainstream jazz as well.
691
MS. BELL: And Commissioner Williams, I would just add
to that that there are a number of artists who actually cross over into both
genres that would blend very well with the sound of the station.
692
COMMISSIONER
WILLIAMS: Yes, I see from your jazz
block schedule, you have Smooth Mornings, Smooth Day, Smooth Drive and Smooth
Nights.
693
MS. BELL: We're smooth.
694
COMMISSIONER
WILLIAMS: You're smooth. You specify in your application that the
proposed station will benefit from the coverage of stories by CKND-TV to use
voice reports from on-scene but the presentation at the radio station will be
handled by dedicated station personnel.
Can you describe any additional measures to differentiate the news
broadcasts on the proposed station and your other media property.
695
MS. BELL: I'm not sure exactly what you're referring
to, but we did respond to that deficiency in terms of ensuring that the news
director for the radio station would be separate than the news director on the
television station. Perhaps Del could
give you a bit of an idea of how the two might work together and how they would
also be different.
696
MR.
SEXSMITH: Essentially, we regard them
as sharing the ability to follow sources and leads together. Typically in a news operation, key decisions
can be made either in the morning when you're planning assignments or during
the day when circumstances require immediate coverage. So in both cases we have independent news
directors. The television station has
its own news director, Smooth FM will have its own news director, and they will
seek to find out where staff has been assigned and whether they can help the
other in terms of providing story information.
697
But the
reporting on air for Smooth FM has to be done by Smooth FM staff, which are a
complement of three journalist announcers, news people in effect, along with
the news director. They would prepare
and present all the material in conjunction with freelance reporters. So the essential component involving the
television station is the ability to share contacts which radio operators can
follow by telephone and in many cases a newsroom and television operation would
follow by camera.
698
MR. NOBLE: Mr. Williams, if I can also add a bit to
that, our news philosophy is essentially to share resources where possible but
to keep the news separate so that the radio services can be viewed as a
separate news service.
699
But television
news and radio news are different, in any event. We're very proud of the news that we do at CKND Global Television
here in Winnipeg. It's in-depth
reporting. You have a longer time to
tell the stories, you can get more sources, broader interviews. The television genre allows you to get ‑‑
the news reports are different than the radio genre. We're not proposing that this be a news station that you're going
to tune to to get your news. We're
proposing that you can get your traffic, weather, sports and the top stories on
the radio station.
700
But if you're a
radio listener and want in-depth news, you're not going to get it. You'll get what you need to know to get home
and get the top stories of the day but it's -- in that respect the news
services are quite distinct, if that helps in your assessment.
701
COMMISSIONER
WILLIAMS: For the first year of
operation, what's the size of the budget dedicated to production of local news?
702
MS. BELL: I'll ask Katherine Browne to answer that.
703
MS.
BROWNE: In the first year we're looking
at about $300,000.
704
COMMISSIONER
WILLIAMS: You're proposing to broadcast
five-minute newscasts on the hour through morning and afternoon drive periods
and major news packages at noon and 6:00 p.m.
Are you planning to broadcast any local information during the weekend?
705
MR.
SEXSMITH: Yes, the intent is between
6:00 a.m. and 6:00 p.m. Saturdays and Sundays to maintain a news complement.
706
COMMISSIONER
WILLIAMS: Okay, thank you. Based on Radio Regulation 1986, the Canadian
content should be calculated for each category of music. You accepted a condition of licence to
devote 35 percent or more of the musical selections from content Category 3 to
Canadian selections broadcast in their entirety and scheduled in a reasonable
manner throughout the broadcast day.
707
How will you
ensure that the musical selections are scheduled in a reasonable manner
throughout the broadcast day?
708
MS.
BROWNE: I'll ask Del Sexmith to answer
that question.
709
MR.
SEXSMITH: In doing our sort of trial
clocks we've come to the conclusion that it's wise to maintain a 30 percent
ratio on average in all hours. There
might be an exception when we're doing a CD release. In the event that we're playing an entire hour by a new artist,
we may have to compensate for it. But
the general feel of the music is to showcase Canadian musicians, to make stars
of Canadian jazz musicians, to make certain local artists are included in that
format, and the best way to do that is to make certain that the content,
Canadian-wise, is reflected throughout the entirety of the day.
710
COMMISSIONER
WILLIAMS: Okay, thank you. Could you spend a few moments defining the
synergies between the jazz channel and the proposed FM station?
711
MS. BELL: You're referring to the Category 2?
712
COMMISSIONER
WILLIAMS: Category 2, yes.
713
MS. BELL: Well, as you know, it hasn't been launched
yet although we hope to launch it later this year. Specialty service, the nature of that service is that it would be
a national service. It's a similar
format than the format for this proposed radio station. So I think what it does is it brings --
they're not going to be collocated and we don't have an awful lot of synergies
planned for the two as of yet.
Certainly in the areas of promotion and marketing, those are important
areas and given the fact that they would be sharing the same format, this would
help give national exposure to local artists in terms of the contest winners
being able to put the video from the concerts on the specialty channel and
giving it national exposure which is something you can't do on radio.
714
So it would be
those types of things. Also, I'd have
to assume that the music director from the radio station and the programmer
from the specialty service would share expertise and work together on projects
and that sort of -- those are the types of synergies that we're looking at
there.
715
COMMISSIONER
WILLIAMS: Thank you. I want to spend a bit of time with your
business plan now. Your application
states that year one is assumed to begin September 1, 2002. How long do you expect it will take to put
the station into operation following the decision date, estimated, say,
sometime in May?
716
MR. NOBLE: Six months.
Six to nine months.
717
COMMISSIONER
WILLIAMS: In your application you state
that the smooth jazz format radio station will be both popular and viable, yet
you do not expect to achieve profitability within the first licence period, a
full seven years. Most of the other
applicants anticipate breaking even within the first four years of the
operation. Why is it going to take you
so long to become profitable?
718
MR. NOBLE: I have the same question for the people who
put it together. I think -- I'll back
up a little bit. This ‑‑
and the reason I've got the interest of our board is the fact that our chairman
is passionate about jazz. He's not in
business to lose money either but he is very interested in this application. He sees it, the board sees it, our company
sees it as our first step in the radio business in Canada and it's an
investment in the future.
719
Yes, this
project in Winnipeg won't make money.
It does break even and start to make money in its sixth term, but
overall over the term it doesn't make a profit, but it does get there
eventually.
720
We see this as
an investment in Canadian talent and in Canadian radio talent and in talent for
the radio industry and CanWest. This is
a first stop on our development of a radio system across the country. It just happens to be in our hometown, which
is to our benefit. It happens to be in
a genre in this market that we understand and love and are passionate
about. The fact that it doesn't make
money is unfortunate but it's an investment in the future and that's how we are
viewing it and that's how we got support for it from our shareholders.
721
COMMISSIONER
WILLIAMS: Is Global willing to commit
to absorbing such losses, particularly if the proposed service does not achieve
the projected share in advertising revenues?
722
MR. NOBLE: Absolutely.
723
MS. BELL: I would just point out that the business
plan is consistent with similar proposals that you've seen from others. I think the difference is that we've
proposed higher levels of Canadian talent development money in the early years
of the licence, which is where the difference comes in.
724
COMMISSIONER
WILLIAMS: Okay. Now, your application indicates that given
the limited amount of jazz currently played in Winnipeg, Smooth FM will have a
minimal effect on the existing radio market.
There are, however, a few stations that target the older demographics,
CKY, CJOB, CBC, CFWK. Will there be a
disproportional impact on these stations?
725
MS. BELL: We don't expect that and I'll let Del
Sexsmith give you a little more information.
726
MR.
SEXSMITH: Before I turn it over to
David Oakes for research information as well, I just wanted to mention that we
are programming newscasts, major newscasts on the hour, because we expect that
our audience will appreciate information and will expect it to be there on a
mature radio station.
727
They can get
more news by listening to CJOB and CBC, and in that respect we're trying to
make certain that if they've come to us for the music and they stay with it, we
will satisfy their need. But by and
large, stations that have made their image as news stations will continue to
maintain most of their audience, I believe, especially since their programming
then segues into extensive talk programming.
That's the instinctive feel we have because there is no jazz product in
the market at all, so we feel most of the audience that comes to us has come
for that reason.
728
To support
that, we have research, which I'll turn over to David, about the format
competitions or competition.
729
COMMISSIONER
WILLIAMS: Thank you.
730
MR. OAKES: From a research perspective, it shows that
first of all there's not a lot of jazz played in the market. The total is 34 and a half hours a week of
jazz and that's dominated by 12 hours a week of a national jazz service on CBC-FM
and I believe 10 hours a week on Magic 99.9.
Now, I doubt if the new smooth jazz station is going to take very much
at all from those two services. Both of
them are late at night, both of them are from 10:00 to 12:00, midnight. And they've been around for a while.
731
The CBC show is
done by Ross Porter, it's a very well established program, and I believe that
the people that are listening to it now are going to continue to listen to it
even though there's a new smooth jazz station in town.
732
With the 99.9
jazz show, Walle Larsson is well established in this market and I quite frankly
doubt if people would leave that show.
They've been listening to it for quite a while.
733
So it seems
kind of strange that I'd be saying to you that of the jazz supplied by those
stations that we won't take many hours tuned away from them. In fact I firmly believe this.
734
I broke out the
jazz audience and took a look at who they're currently tuning, and I would say
during the day we will have more impact on these other stations than we will at
nighttime. And the number one station
currently tuned by what I call the primary jazz audience, 29 percent of them
tune to CJOB. They tune a lot of stations;
their tuning is quite dispersed among a number of stations. So I'm sure we'll take some hours tuned away
from CJOB and some hours tuned away from a lot of these other stations they
tune to, but not very much. These are
not competing services at all.
735
So I think in
total that most of the new hours or most of the hours tuned to the new smooth
jazz station will come from new hours from existing listeners in the market.
736
COMMISSIONER
WILLIAMS: Thank you. You are projecting the smooth jazz station
to achieve a share of 5 percent in year one, rising to a little over 7 percent
in year seven. The jazz station in
Hamilton has been on the air since the fall of 2000 and has achieved a share
level much lower than your projections for year one. What's the major difference -- the differences, I guess ‑‑
in you believing that the Winnipeg market is so much different than the
Hamilton market?
737
MS. BELL: The markets are quite different. The Hamilton station is purely a smooth jazz
station. I don't think they're doing
any mainstream jazz also. I'm not sure
that the Hamilton market has the same level of interest in jazz within the
community and established local jazz artists than there are in the Winnipeg
market place. It's a very unique
market. Hamilton, to my knowledge,
doesn't have its own jazz festival, it doesn't have the same level of
infrastructure.
738
And aside from
that, the stations in the U.S. who are programming smooth jazz are doing quite
well, actually, in a highly, highly competitive market. A lot of them are reaching four's and five's
very easily in markets where there are numerous stations competing for
audience.
739
So we're
confident that we can achieve those levels.
740
MR. OAKES: If I can add just one very quick point to
that. I live in Toronto. I'm getting into jazz now. I have friends in Hamilton who are radio
programmers. They've seen virtually no
marketing for the station.
741
MR. NOBLE: One of the big benefits, Commissioner, that
we have is the fact that we have CKND on the market. That will give us a huge promotion value when we launch the
service.
742
And I think the
other reason that Hamilton so far hasn't shown a lot of success -- promotion is
the biggest, I think you're right, David ‑‑ there is no jazz
history in that city. Charlotte, you're
right on that.
743
The other
reason is that there's a lot more radio signals that flood into Hamilton so
finding a new service and attracting attention to a new service is very
difficult in that market. There's also
a lot of television signals in that market.
744
MS. BELL: But not too many.
745
COMMISSIONER
WILLIAMS: Okay. Your total projected seven-year operating
expenditures are one of the highest among the applicants and we spoke earlier
about part of the reason why that was so.
You also indicate that Smooth FM will derive certain benefits and
synergies from CKND-TV and from other CanWest resources. Can you quantify the savings that this will
represent to Smooth FM's operations?
746
MS. BELL: We've quantified the synergies at $600,000
but I could ask Katherine Browne to give you a bit of a breakdown if you'd
like.
747
COMMISSIONER
WILLIAMS: Okay, and maybe when she does
so, she can be thinking about were any of these savings incorporated into the
business plan?
748
MS.
BROWNE: Just to clarify, I believe you
made the point that our operating expenses were considerably higher than some
of the other applicants.
749
A large part of
that is due to our expenditures in programming and sales and marketing which we
felt were key areas to invest in, administration in general as an example. We've actually incorporated significant
synergies in that area. So the $600,000
that we're looking at for synergies will basically come from primarily back
office administration functions, technical as well as relying heavily on
marketing promotion expertise that's already in place with CKND.
750
COMMISSIONER
WILLIAMS: Thank you. Since the fall of 2001 the Conference Board
of Canada has revised downward Winnipeg's projected GDP growth for 2002. We've also had the unfortunate experience of
September 11th. What is your assessment
of the current economic uncertainty and its effect on Winnipeg's economy and
how will this affect your business plan and advertising revenues in particular?
751
MS. BELL: I'd like to ask Ken Goldstein to address
that question.
752
MR.
GOLDSTEIN: Commissioner, we prepared
the projections back in August in the report and we took a very conservative
perspective then, like tend generally to be a little bit conservative in making
these projections. I think it's better
to be safe than sorry.
753
In fact, what
has occurred in Winnipeg radio is actually quite exceptional and quite
fascinating. The Winnipeg radio market
for the first four months of the current broadcast fiscal year or the last four
months of the calendar year, is up 13.1 percent. And the growth therefore looks like it might even be a little
higher than the conservative projections that I did last August.
754
And I went
looking for why, because these things don't happen in isolation and a couple of
weeks ago Statistics Canada came out with its retail trade data for November
and there was Manitoba with an 11.4 percent increase in retail trade over the
same month a year earlier. That, of
course, radio being a very local medium contrasting with television being a
more national medium, that translated right into radio, that retail activity.
755
COMMISSIONER
WILLIAMS: In your opinion, can the
Winnipeg market support more than one radio station?
756
MS. BELL: Mr. Goldstein?
757
MR.
GOLDSTEIN: I think it could clearly
support the station we've applied for, given its -- and I don't say that only
to be joking; I mean it quite seriously ‑‑ the station we've
applied for because the format is non-duplicative, and at the revenue levels
that we have applied for.
758
I think if
pushed, I probably would say that the market might support one and a half
stations. I suspect that the ‑‑
for example, were you to licence Smooth FM and allow the movement of CKY from
AM to FM, that would be what I would call one and a half. So that would be, I would think, a prudent
approach in economic terms to licensing.
759
COMMISSIONER
WILLIAMS: If ‑‑ not
that the Commission takes imprudent actions, but if we were to license another
one of your competitors other than the one that you've suggested, what would
the impact be on your business plan?
760
MR.
GOLDSTEIN: Well, I suspect that ‑‑
and again there are the other applicants too, the low power applicants. I suspect most of the low power applicants
would have very little impact on our business plan.
761
If one were to
license the other of the full power applicants, if you will, for want of a
better term, I suspect it would be much more disruptive of the rest of the
market than our business plan per se because we have got a unique format.
762
COMMISSIONER
WILLIAMS: Okay, thank you. As you know, your application is competitive
and technically mutually exclusive with other applications by Corus Radio
Company and Rogers Broadcasting Limited for the use of the frequency 99.1. Under this scenario, the Commission seeks
the competitors' view to assist it in deciding which applicant has the proposed
best use of that frequency.
763
From a strictly
technical perspective, in what way does your proposal constitute the best use
of the frequency 99.1?
764
MS. BELL: I'm going to ask Jim Moltner to go through
that with you.
765
MR.
MOLTNER: In a nutshell, of the
frequencies available to us which meet our coverage objectives, 256 or 99.1
fits technically best at the site we've chosen, whereas the other available
channels we feel technically work best at another site such as proposed by
Corus or Rogers. I can go into details
if you want me to.
766
COMMISSIONER
WILLIAMS: Well, maybe a thumbnail
sketch of why that is so.
767
MR.
MOLTNER: Okay. We have identified five high power channels,
as have Rogers. Two of these channels,
88.7 and 89.9, while high power channels, are not full power channels. They are required to protect channel 6 so
they'd probably be operable at maybe half power. And given that we wish to have a competitive signal and the fact
that our site is some distance out of town, we'd rather not go with something
like half power, which leaves three other channels, the 99.1 which we've all
applied for, of course; and the other two, 273 which is 102.5, and 284, which
is 104.7. And I will just compare the
99.1 and the 102.5 because the 104.7 is similar.
768
The 99.1
implemented at the site we proposed, which is the CBC site at Starbuck, is
fourth adjacent to CBW and CFWM and those are also collocated at that
site. So by collocating at that site
there is no fourth adjacent interference to those stations, whereas the Rogers
proposal for example, or the Corus proposal, there would be fourth adjacent
interference to those two stations because they are geographically separated.
769
Now,
considering the other alternative, 102.5, if we were to locate on that channel
at our site there would be possible third adjacent interference to CKMM, and in
addition there are some requirements to directionalize the antenna to protect
U.S. stations, which we cannot do because we are using the CBC's
omni-directional antenna.
770
As far as
Rogers, for example, is concerned, using 102.5, their proposed site is within,
I believe, about five kilometres of the third adjacent CKMM site, which would minimize
any potential interference. And in
addition, since they're building their site from the ground up they can
directionalize their antenna to meet the U.S. protection.
771
The technical
arguments of the remaining channel, 104.7, are quite similar. So in summary, we feel that 99.1 is best
located at the CBC site whereas the other two channels can be and in fact are
best located somewhere closer to Winnipeg, such as the site proposed by Rogers
or Corus.
772
I hope that was
thumbnail enough.
773
COMMISSIONER WILLIAMS: Yes.
Maybe a little bit on your proposed coverage area.
774
MR.
MOLTNER: Well, it's an omni-directional
station. The coverage on paper, as we
were discussing earlier, is 80-90 kilometres and typically can go ‑‑
it depends on interference from other stations, but 150 kilometres, something
like that. But basically we're looking
for a city grade coverage of Winnipeg itself and then a grade B or half
millivolt regional coverage out to maybe 90 kilometres.
775
COMMISSIONER
WILLIAMS: How does that coverage area
compare with the other applicants, say with Rogers and Corus?
776
MR.
MOLTNER: The coverage areas are fairly
identical other than their circle is shifted by 15 kilometres east from ours
just because of the site. As far as the
coverage of 99.1 versus the other two channels, they are pretty well identical
as well.
777
COMMISSIONER
WILLIAMS: Now, given the relative
scarcity of FM frequencies in Winnipeg, what would be preferable in the market
at this time: licensing a new FM
service or moving an existing radio service from the AM to FM band?
778
MS. BELL: Well, I would say Commissioner Williams,
that you could actually do both because as we know, there are other frequencies
available. Because of the music format
that we've proposed, because of the significant contribution that we're making
to Canadian content, talent development, diversity in the marketplace and new
radio entrants in Winnipeg, we feel that we're on solid ground to be asking for
the best frequency available, which is 99.1.
779
MR. NOBLE: And I think using it for a new format, jazz
format, which Winnipeggers love, is a great idea.
780
COMMISSIONER
WILLIAMS: If for any reason, frequency
99.1 were not available, would you be able, ready and willing to use another
frequency for your proposed station?
781
MS. BELL: Commissioner Williams, we would be prepared
and of course we would accept a licence if we were asked to use another
frequency, but we're going on record as saying that our preference is 99.1.
782
COMMISSIONER
WILLIAMS: Should 99.1 not be available,
what would the impact be on your business plan, or would there be an impact?
783
MS. BELL: I'm not sure that it would be significant.
784
MR. NOBLE: It would cost more capital to
construct.
785
COMMISSIONER
WILLIAMS: So maybe eight years out
instead of seven in?
786
MR. NOBLE: There would be a bigger bullet up front,
cash bullet up front.
787
COMMISSIONER
WILLIAMS: Could you please illustrate
how the news gathering and programming will be initiated amongst Global's various
undertakings, the Financial Post, CKND-TV and the new proposed FM radio
station?
788
MS. BELL: I'll ask Del Sexsmith to do that.
789
MR.
SEXSMITH: As we discussed earlier,
there are the two scenarios: the one,
the pre-planned news coverage, and the second one is the breaking news. So you'd have two teams where the news
directors early in the morning have to determine which stories they're going to
be covering for certain, news conferences, special appearances and so forth.
790
So in those
circumstances, the television news team would of course be looking for
opportunities to take their cameras to the event whereas the radio news team
would be looking for interviews that it could update throughout the course of
the day.
791
Thanks to the
use of computers and Newsstar, any information gathered by a radio news
reporter can be entered into the system and then the television crew then has
access to that information, can file its story the same way, and then the news
team has updated information which it can then use both on air and in terms of
looking for comment by microphone or by telephone for broadcast in the radio
environment.
792
So that's one
area where I think they would work together independently but also with mutual
sharing of sources and stories.
793
A second
example, of course, is breaking news where, of course, we hear there's a major
car crash or there's a fire or there's something of that nature and the first
reporter on the scene has the ability to go live. And from the vantage point of radio, that's an excellent tool for
Smooth FM to have and doesn't require necessarily that we have an entire team
of reporters be on the scene, but we can get a report from someone who is
there, so Global TV could be assisting us in that respect. By the same token if a radio news reporter
gets to the scene first, can gather information and have it ready both for
Smooth FM but can turn it over to the Global news reporter when he or she
arrives.
794
So we see those
two synergies as being natural in a news operation such as that.
795
MR. NOBLE: If I may, the big benefit to Winnipeggers is
that we are adding, I think, three new news people to the system and quite a
few freelancers, so we're increasing the overall capability to cover and to
seek out news stories in the Winnipeg area.
So we see that as a benefit to not only the listeners but also our
television viewers.
796
COMMISSIONER
WILLIAMS: How do you intend to preserve
the editorial independence of the news programming amongst the three
undertakings?
797
MS. BELL: I believe we've already accepted a condition
of licence as part of the deficiencies.
Basically, as we said in the application and the response to deficiency,
the news director will be separate. The
news director for the radio station, while there may be some collaboration on
getting information for stories, the radio news director makes the decisions as
to what goes on the radio station, the order, that sort of thing. That is his or her responsibility.
798
In terms of the
television station, it would remain in the hands of the television station news
staff.
799
COMMISSIONER
WILLIAMS: Would you have a code of
ethics or something similar to what was proposed in your group licence renewal,
also part of this application?
800
MS. BELL: We didn't feel that that was necessary
because we don't own any print properties in that market and that code really
addresses the issue of cross-ownership between print and television. But what we did propose was separate news
director, while there'd be some collaboration on stories or information
sharing, there would be separate and distinct news reporters for each, and
we've committed to that very clearly.
We feel that that would be essential -- not essential, but enough to
alleviate any concerns.
801
The other thing
is we will continue to adhere to the code of ethics and the code from the
RNTDA.
802
COMMISSIONER
WILLIAMS: Okay. Thank you.
Could you elaborate on your plans to expand your broadcast activities to
the radio sector, and in particular, how is this proposed transaction in the
public interest?
803
MS. BELL: Gerry?
804
MR. NOBLE: Sure.
Well, we at CanWest, our response to increased fragmentation in the
television industry and overall in the media industry is to expand our media
offerings across a horizon of media in Canada.
We have television and we have print.
We're working on some outdoor projects.
This is our first toe in the water in radio. And if we are successful here, even if we are not successful, we
will apply in other markets when the opportunity arises and we will look at
other markets to see if there's opportunity for us to be involved in radio.
805
In this
particular market, our research shows us that the best format is smooth
jazz. In other markets, it might be a
different format. So although here it
makes eminent good sense to launch a new station in the smooth jazz format, six
months from now in Montreal or in Quebec or in Calgary or in Regina, it may
make more sense for a hot A/C or for a country -- whatever the research show
us.
806
So we're not
proposing to develop a national brand of smooth jazz radio stations but we are
saying that we are interested in radio.
We understand the broadcast environment in Canada. We understand the regulatory environment in
Canada. We make promises to the
Commission and we keep those promises.
We perform on everything we say we do.
So we think that we are logical people to get involved in the radio
business.
807
Our advertisers
understand us in the local markets because we have television stations and we
think this will benefit them as well.
And we have success in attracting viewers to our television
station. We hope we have success in
attracting listeners to our radio station.
That's what it's all about in the end.
So we think across the country the strategy is to now seriously get
involved in radio and this is our first step.
808
COMMISSIONER
WILLIAMS: The addition of another
platform in terms of CanWest Global raises some concerns. CanWest is a diversified company with an
important presence in Winnipeg and you are in the newspaper business with the
National Post and your television station.
One could argue that allowing CanWest Global to own another broadcasting
platform in the Winnipeg market could lead to a reduction in the diversity of
editorial voices and/or could affect the sharing of local advertising revenues.
809
Considering
that CanWest Global is a well diversified broadcaster, could you elaborate on
the potential impact that granting a radio station to this group would have on
the Winnipeg market, namely in terms of diversity of editorial voices and in
terms of sharing of the local advertising revenues?
810
MR. NOBLE: Sure.
We're familiar with some of the arguments in that area, we canvassed it
quite extensively with the Commission at other hearings, and we're prepared to
respond to that here as well. Our
expert in this area is Ken Goldstein from both the economic and the editorial
side.
811
Ken, as you
know, is a recent recruit to CanWest but well known to CanWest and well known to
the Commission. So Ken, I'll turn the
mike over to you and ask you to respond.
812
MR.
GOLDSTEIN: Yes. In this market the addition of a CanWest
voice in radio would actually add to diversity in the radio market. In terms of the share of advertising in this
market, we are not sufficiently large either in the TV or in the newspaper,
through the National Post in this market, to represent any kind of an unfair
advantage. There is lots of competitive
alternatives here. There's the Craig
station, there's the CBC, there's CKY, which is now owned by Bell Globe
Media. And if you want -- however you
want to add the numbers, if you want to take a look at the share of the
television market and then add the television market to the radio market and
then add what the share would be, that would actually dilute the share,
interestingly enough.
813
So I don't
think there is the kind of presence there that necessarily poses a threat in
terms of the advertising market, and I would note I do not believe you have
before you any interventions from the advertising community suggesting that
this would be a problem in any way.
814
Now, as far as
the editorial side is concerned, it is quite clear that the editorial voices
would be separate, that there would be separate news directors. It is quite clear that the National Post
editorial policy is not going to be made in conjunction with this new radio
station necessarily.
815
The place where
you're going to see the kinds of cooperation between the National Post and the
radio station ‑‑ if I might just pick one example, we know
that this kind of a format skews to a certain upper income demographic, and
therefore implicit in that is an interest in business news. There's an opportunity then for a reporter
using the phone, to get on the phone with the National Post reporter that has
reported something on the aviation industry, for example, and get a brief
interview with the aviation expert on the business pages of the National Post
or the Financial Post, and then turn around and go to Standard Aero or one of
the other major firms, because Manitoba is a very important place in the
aviation industry in Canada, and fill that out with a local interview.
816
That presents a
very compelling package of both the national and the local point of view around
a subject of great interest to this city.
It seems to me that adds to diversity; I don't think it takes away from
diversity.
817
COMMISSIONER
WILLIAMS: Okay. Thank you very much, and thank you
panel. That's all of my questions. I'll turn you back to our Chair.
818
THE
CHAIRPERSON: Mr. Cardozo?
819
COMMISSIONER
CARDOZO: Thank you, Madam Chair. I just want to pursue a couple of things
that have been talked about. One is the
popularity of the format, and you noted in your opening that smooth jazz is one
of the fastest growing formats, I think, in the U.S. I'm wondering why you think existing radio broadcasters haven't
switched format to smooth jazz given that it is as popular as you say?
820
MS. BELL: I don't know why they haven't switched to
it. I do know, however, that in the
last couple of years you've had a number of applications before you in a
variety of markets for new stations and many of those applicants have applied
for smooth jazz format, so I think it's an area that people are interested in
getting into, not necessarily switching existing formats that may be doing
quite well for them in the markets where they're already serving audiences.
821
COMMISSIONER
CARDOZO: So it's not worth leaving what
you're doing, if you're doing successfully in that area and trying, even though
there is seemingly untapped markets for smooth jazz?
822
MS. BELL: I'm only assuming that that's why you
haven't seen existing radio players going into that direction. They have taken another strategy in terms of
trying to tap into that and the strategy seems to have been to apply for new
stations where there have been calls.
823
It's been quite
overwhelming. I think there have been quite a few jazz applications in the last
two years.
824
MR. OAKES: If I could add very quickly to that, the
U.S. experience, smooth jazz started in the '80s but its success really hasn't
been until about, oh, maybe five or six years ago.
825
COMMISSIONER
CARDOZO: Okay. On the matter of news and the separation of
TV and radio news, I take it it's clear that you have no plans of having
simultaneous audio feed of your television news ‑‑
826
MS. BELL: No.
827
COMMISSIONER
CARDOZO: -- as seen in markets
occasionally?
828
MS. BELL: Oh, sorry, I thought I --
829
MR. NOBLE: No, no, you have to speak up. No.
830
COMMISSIONER
CARDOSO: No. I just wanted to make sure you've got that on the record.
831
Now, on the COL
that you have agreed to, what you've agreed to is a COL similar to the one that
is on the CanWest Global television licence with regards to separation between
radio and television?
832
MS. BELL: That's correct.
833
COMMISSIONER
CARDOZO: Okay, but you don't feel it's
necessary between radio and newspapers?
834
MS. BELL: At this point we don't, as we've said. Yes, we do own the National Post but we do
not have any local newspapers so it wouldn't be the same type of relationship
that you would have between a local television station and a local radio
station. We didn't feel that it was
necessary, and as we say with the other, we adhere to other codes in terms of
separation and ethics through the CAB code of ethics and the RTNDA code.
835
COMMISSIONER
CARDOZO: But at the radio station you
could be dealing with national stories that are the same as the National Post and
you could be dealing with local stories that the National Post might
carry. So there may be an occasion when
such a condition of licence could be useful.
836
MS. BELL: I'm not certain how it would apply. I guess we would have to go back and take a
look at it and maybe we can answer that a little later. I'm not sure what, in addition to what we've
already agreed to, would alleviate your concerns.
837
COMMISSIONER
CARDOZO: So as I understand it, you're
okay with the condition of licence in terms of the radio and television and
with regards to between radio and newspapers.
You are or you're not amenable to it, to a condition of licence there?
838
MS. BELL: We haven't agreed to one yet. I guess we'd have to take a look at it
because I don't think that you've actually proposed anything specific unless
you want us to take --
839
COMMISSIONER
CARDOZO: That's what I'm asking you
is ‑‑
840
MS. BELL: Yes, you want us to take a look at the code
that we already have. And I guess what
I would say is it would make no sense for us to share news management between
the two. We would have no -- the news
management would obviously be separate between the radio station and the
newspaper. But we'll go back and take a
look at it and we can respond to that later.
841
COMMISSIONER CARDOZO: Now, in terms of the concerns that come up
periodically and that have come up recently about concentration of news voices
or diversity, lack of diversity of news voices, a lot of the discussion
recently has been around newspapers and to some extent television. Is it your sense that there's a similar
level of concern with regards to radio or the type of radio you're
proposing? You've got -- is it two
half-hour newscasts a day, Monday to Friday?
842
MR.
SEXSMITH: The actual news composition
is a five-minute newscast at the top of the hour in drive periods, 6:00 a.m.,
7:00 a.m., 8:00 a.m., 4:00 p.m. and 5:00 p.m., and that is also Category 11
news. It's then followed by other
spoken word components including business news, entertainment news, sports and
so forth.
843
In the special
packages at noon and six o'clock, the package will contain eight-minute news
package, sub-category 11, followed by a balance of, again, the same features
business news, entertainment news, weather and so forth.
844
COMMISSIONER
CARDOZO: So the noon and six o'clock
news may be a packaging of some of this, the news that you've got during drive
times plus a bit more in depth?
845
MR.
SEXSMITH: Oh, yes, updated, in depth
and meant to service those who heard us in the morning and need more material
at either noon or six o'clock.
846
COMMISSIONER
CARDOZO: In terms of the concern ‑‑
and there have been some interventions in terms of editorial diversity ‑‑
what would you say in response to that?
Should people be concerned about concentration of news if you have news
voices in the market between television and radio and the presence of newspaper
in this market we're just looking at, at the National Post?
847
MS. BELL: I'll ask Gerry to address that and perhaps Mr.
Goldstein would want to add something to it.
848
MR. NOBLE: I don't think there should be a concern at
all. What we're adding here is a new
radio voice, it's a new radio owner, it's a new radio voice. Yes, the ownership does have an existing
television voice in the market but we're putting in controls to ensure that
it's a separate and distinct service.
The stories may be the same but they're being presented by different
people. The editor decides what goes to
air and what doesn't go to air.
849
I think some of
the negative interventions related to this application have more to do with
what has been expressed by our print competitors than anything to do with a
perceived lack of diversity in this local market.
850
The fact is,
our company has an editorial policy and a lot of people don't like that because
our company wants to express their views.
It hasn't stopped anyone else from expressing theirs in our paper. So in fact the irony is that we've added
another diverse voice to the Canadian news landscape and people seem to
be ‑‑ our competitors seem to be upset about that. We haven't closed anyone else down. We haven't shut anyone else up in our
newspapers.
851
So in direct
reply to your question, I don't think they should be concerned at all. Our owners take a stance and they will
express that now and again in their newspapers and to a certain extent maybe
perhaps in some editorials on television that we might run from time to
time. That's not bad. In fact I think that's good; it generates
debate. But the fact that it's a new
voice in the market seems to upset some of our competitors which I find quite
ironic. The very thing that they are
fighting for, they are claiming we are putting down when in fact we're increasing
it.
852
So in this
application, I don't think there should be any concern whatsoever about
diversity of voice in this market, indeed, in what we're trying to achieve
across the country with our print group.
So there should be no concern.
853
COMMISSIONER
CARDOZO: Thank you. Mr. Goldstein, would you like to add
something?
854
MR.
GOLDSTEIN: First of all, he said it
very nicely. But I would just add that
in fact, you know, we're living in a media world that is changing, but if one
actually goes through the trends in media over the last 50 years and takes a
look at what really is there and how Canadians really use the media, we have
more diversity than we've ever had in history.
855
We have a
situation today where 575,000 Canadians have registered for the New York Times
online. That's greater than the
circulation of any Canadian daily newspaper except the Saturday edition of the
Toronto Star. Canadians are getting
information from more sources, more different owners, more different kinds of
vehicles than they ever have in the past.
856
And interestingly
enough, one of the top 10 and two of the top 20 radio stations on the Internet
usually are jazz and so I think that what we are doing is adding to
diversity. I do not think any opinion
is being closed off at all. And we have
clearly indicated that we will have separate editorial news management
structures for the radio and the television.
857
COMMISSIONER
CARDOZO: Okay. Thank you.
Thank you, Madam Chair.
858
THE
CHAIPERSON: Back to Commissioner
Williams.
859
COMMISSIONER
WILLIAMS: Sorry, I have one more technical
question. It's back to this coverage
area. If I understood your proposal,
the coverage area shifted east about 15 miles; is that correct?
860
MR.
MOLTNER: Kilometres.
861
COMMISSIONER
WILLIAMS: Or kilometres, okay. As a result of that, does your coverage area
serve more people from Manitoba or less, or are there any significant
communities that have been picked up or lost as compared to the competing
applications?
862
MR.
MOLTNER: I would have to get back to
you on that one. I can think of no large
communities on the fringe which --
863
MS. BELL: Perhaps what we can do is take some time and
assess this and come back to you with an answer, an intervention.
864
COMMISSIONER
WILLIAMS: And maybe looking at the half
millivolt coverage area as well. Okay.
865
MR.
MOLTNER: Yes.
866
COMMISSIONER
WILLIAMS: Thank you, Madam Chair.
867
THE
CHAIRPERSON: And when will you get back
with that, Mr. Moltner?
868
MR.
MOLTNER: Phase II?
869
THE
CHAIRPERSON: Are you from Manitoba?
870
MR.
MOLTNER: No.
871
THE
CHAIRPERSON: Maybe you should talk to
Mr. Goldstein and he can tell you the differences in the coverage.
872
MR.
GOLDSTEIN: Commissioner, I am from
Manitoba and if I might be permitted the indulgence to respond to the original
comment from Commissioner Williams, the dry cold.
873
THE
CHAIRPERSON: But the sun always shines.
874
COMMISSIONER
WILLIAMS: I've spent most of my life in
the Northwest Territories. I'm familiar
with dry cold.
875
THE
CHAIRPERSON: I wanted to ask you some
of the questions that I asked some of the previous people. Smooth jazz, new genre, and I think, Mr.
Sexsmith, you said have to make Canadian stars, and yet every musician that I
talk to says the way you make stars is by talking rotation, not CDs that will
collect dust but rotation. Was that
considered at all in your application?
876
MR.
SEXSMITH: If the question is to me,
Madam Commissioner ‑‑
877
THE
CHAIRPERSON: Well, anybody.
878
MR.
SEXSMITH: -- the intent of the station
is to make Canadian jazz musicians stars, and in terms of the actual rotation for
us, people that we want to identify and pioneer in this star area and showcase,
I would plan a rotation of 18 times per week and --
879
THE
CHAIRPERSON: So the people on your
compilation CDs or on the CDs, would you be doing that for them?
880
MR. SEXSMITH: Yes.
881
THE
CHAIRPERSON: So rotation of 18 for?
882
MR.
SEXSMITH: For those selected cuts that
we've dealt with in the music meetings and have determined should be showcased
properly and will enrich the sound of the station.
883
THE
CHAIRPERSON: Okay. So you make a compilation CD and you're not
going to do full rotation on all of those people, you're just going to do it on
the ones that you think are good?
884
MS. BELL: I just wanted to make a clarification. It's not a compilation CD. There's actually one CD per person.
885
THE
CHAIRPERSON: All right. So then I feel better. I feel a lot better.
886
MS. BELL: All right.
887
THE
CHAIRPERSON: Thank you. I'm comforted, as they say. And what about other new jazz musicians?
888
MR.
SEXSMITH: Within the Canadian context
or -- Within the Canadian context, the
idea is to make certain that we represent them all fairly so if we take a low
to medium rotation of six to 14 times, we can properly identify any new
Canadian jazz musician and make certain that our station stays current and
recurrent.
889
We feel the
best way to enrich the sound of the station ‑‑ and to a large
extent we'll be pioneering this, but we take notice that the success in the
United States has been with current ,material and so I think the idea of
showcasing talent and working with new talent is paramount for the format to be
heard and successful.
890
THE
CHAIRPERSON: Mr. Sexsmith, throughout
this afternoon, you have been using the word "we" and I see that you are a
president with a media strategy company, and Ms. Bell didn't say that your
involvement was anything other than a consultant, and yet you seem to know the
programming and the news coverage and that sort of thing. Are you going to become a manager of
this? Are you getting a new job?
891
MS. BELL: Maybe I should answer that. As you know, because we don't have a radio
infrastructure, but of course we thought it was important to have someone with
us who has extensive background in radio, we asked Mr. Sexsmith to help
us. As it turns out he's a great music
lover, very involved in the community and has lived here his whole life, so if
you give us the licence then maybe he might have a job.
892
MR. NOBLE: Actually, you can guess who wants to run it.
893
THE
CHAIRPERSON: I think I can, yes. In terms of the synergies ‑‑
and I guess I ‑‑ as soon as I hear you talking about the
synergies between CKND and a radio station, I start to think about when I was
practising law and how everybody would have their what I call pet expert. And so if a lawyer was walking into court, I
would know exactly who their expert would be because that's the expert they've
always used. I would know exactly what
that expert was going to say.
894
And I have to
say that I see the same kind of thing when CBC shares contacts, that that in a
lot of ways defines what your coverage will be. If you want to ask somebody ‑‑ and I can only
think about when I was in Saskatchewan, they would phone me for the consumer's
point of view on utility rate increases and I'd say the same thing to radio as
I'd say to, you know -- and then they'd phone the other person on the
other side who they've had on their Rolodex for the last 10 years, and that in
fact dictates the story.
895
So I guess I
worry myself about sharing contacts to any great degree on that, and while I
understand it's a good idea to get a name from somebody, I wonder if some of
those synergies in fact direct what your news will be and the perspective your
news will have.
896
MS. BELL: As we've said earlier, the nature of the
news on radio and news on television is very different, and I would also point
out that there are other broadcasters in this country, namely CHUM and Craig up
until recently, who own both radio and television stations in the same market,
and I don't think that that reduced the diversity in those markets at all or
that that became a problem.
897
I think the
other point here is that we would be covering specific areas on the radio
station that might not be covered as in depth on our television station. So I don't see that as being a problem.
898
MR. NOBLE: And if I could just add, Madam Chair, that
if we hire properly ‑‑ and we will ‑‑ the
news editor in radio, he will have his own Rolodex ‑‑
899
MS. BELL: Or she.
900
MR. NOBLE: Or she, right Charlotte. I have direct
experience of this in New Zealand where we did combine radio and television,
and in order to -- you have to have separate news directors and they might
share story ideas, but I tell you they don't share the same contacts. Most news directors have their own and use
them, protect them and don't share them, has been my experience.
901
The other main
area of synergies, if I can just continue, in radio and television is primarily
in the administrative promotion and sales support areas. Other than that, the programming, direct
sales and technical -- programming and direct sales and news are essentially
separate.
902
THE
CHAIRPERSON: I wanted to also be very
clear on your investment, as you called it, because overall there is no profit
projected by Global over the first licence term. And while I recognize it's an investment, I also recognize that
there are other "investments" in other parts of the broadcasting industry that
these days may be requiring further investment.
903
I want to be
very clear with you that you will be applying for a specialty licence that
clearly would require a COL and that you certainly will not be coming back, I
expect, Mr. Noble, with requesting lower commitments or to change your COL on
the specialty format.
904
MR. NOBLE: That's correct.
905
THE
CHAIRPERSON: Thank you. Now, I'm going to stick my hand in a
hornets' nest. You've talked about the
money for the Jazz Festival and for the Asper Jazz Series, and I'm sitting here
and if I've got it correct, CanWest and/or someone related with CanWest
provides some financial assistance to the Jazz Festival every year?
906
MS. BELL: That's correct, it's $10,000.
907
THE
CHAIRPERSON: So then it's easy for us
to measure the extra seventy-two that you're planning?
908
MS. BELL: I think, because we've given you a breakdown
as to how the money is going to be spent and they're actually adding concerts
that already are not there, I believe it's easy for you to track and to see
that it's incremental. It's not a part
of what we've done in the past.
909
THE
CHAIRPERSON: Good. Because that was my concern, that you can
provide us when you report with some evidence of its incrementality.
910
MS. BELL: Absolutely.
911
MR. NOBLE: Yes, but Madam Chair, just to be clear,
we're making the commitment for the radio station, Smooth FM. I'm not here to make a commitment -- ongoing
commitment for CanWest to continue to contribute. That's a decision that they make in their office on an annual
basis and they support several other -- many other worthwhile initiatives in
Winnipeg. I'm not here to commit them
to the Jazz Festival every year. However, we are saying that the Smooth FM
radio station will contribute, as we have evidenced in our application, if that
helps you.
912
MS. BELL: What I'm saying, Commissioner Cram, is that
the initiatives that are part of our Canadian talent development are additional
to what is already being done at the festival; that's all I'm saying. It's incremental to what they are doing.
913
THE
CHAIRPERSON: And that's my concern,
that we know that it's ‑‑ and I'm not, you know ‑‑
I mean, it's just the same as CTV ‑‑ is how we would establish
what is incremental and in terms of an annual reporting, if we were to license
you. And the next part, the jazz
series, would be even more problematic, would it not, in terms of establishing
that it is incremental money?
914
MR. NOBLE: Well, again, that's something that the
Aspers do personally. Izzy does it just
out of his love of jazz and his keen desire to support and develop talent, and
I have no reason to believe that -- I have no reason to believe why he wouldn't
continue it but this station isn't here to supplant that. But again it's a personal --
915
THE
CHAIRPERSON: I understand that.
916
MR. NOBLE: It's a personal decision that the Aspers
make and --
917
THE
CHAIRPERSON: My problem is from a
regulatory point of view ‑‑
918
MR. NOBLE: Well, from a regulatory point of view, this
is new money there that isn't there now.
919
THE
CHAIRPERSON: And how can you prove it's
new money and how can you prove that it's merely not going to replace
something? That's the issue. How can you prove that it's
incremental ‑‑
920
MR. NOBLE: Well, clearly it's not ‑‑
921
THE
CHAIRPERSON: -- you can't give a base
and that's what I meant by the hornets' next.
922
MS. BELL: Well, I guess the only initiative really
that would be ‑‑ the $200,000 that's going to factor per year
for the first five years, it's all third party. The money that's going to the University of Manitoba is also -- I
mean I guess the only initiative that you're concerned about is the Asper
Series and we've only put an additional $8,000 in that initiative to actually
add a concert.
923
THE
CHAIRPERSON: I suppose that's
true. The Jazz Festival, at the end of
the day, you're saying you're going to be adding additional benefits?
924
MS. BELL: We're adding free concerts and in fact some
jazz, smooth jazz concerts which are not there currently.
925
THE
CHAIRPERSON: Okay. And they won't be replacements of anything
that -- well, you won't know.
926
MS. BELL: I don't -- I believe they're additional to
what's already being done.
927
THE
CHAIRPERSON: And my last question, what
is your second choice of frequency?
928
MR. NOBLE: It's not the AM that Rogers --
929
MS. BELL: No, no, no, no.
930
THE
CHAIRPERSON: (Inaudible ‑‑
off microphone) FM that may be on the market.
931
MR.
MOLTNER: We would have to look at it
because both of the alternatives involve these adjacent interferences to other
stations. In addition, the 104.7
displaces Portage La Prairie allotment which I imagine the Commission and/or
Industry Canada might not be too happy about.
So off the top of my head, I would say 102.5 but we would have to look
at it from a technical perspective and choose a ‑‑
932
THE
CHAIRPERSON: So maybe you can come back
in Phase II?
933
MR.
MOLTNER: Okay.
934
THE
CHAIRPERSON: And for anybody who wants
to know, it's Portage La Prairie here in Manitoba.
935
LEGAL
COUNSEL: Thank you, Madam Chair, just a
couple of questions. Starting just for
a minute on the Project Smooth, Commissioner Williams asked a couple of
questions about the promotional expenses, and there would be, I think, an
amount of $8,000 for the promotion of the contest consisting of artwork,
newspaper advertisement and flyers. Can
you just advise to whom you would be paying the money for that and of what
consists those things?
936
MS. BELL: Those would be third party. None of them would be paid to CanWest-owned
newspapers or -- it's local businesses.
937
LEGAL
COUNSEL: I see. So they're third party --
938
MS. BELL: Absolutely, yes.
939
LEGAL
COUNSEL: Thank you. Also, there would be winners of the Project
Smooth project, I guess each year, two winners and each receives a prize of
$10,000. What would be the criteria
used to select those winners?
940
MS. BELL: We haven't actually developed the criteria,
but as we've said, there would be a panel of judges of experts which would also
include one person from the radio station, most likely our music director, to
work with those people, perhaps some local -- people locally from the press who
cover jazz and a couple of people from record companies. And they would be best suited, I would
think, to identify the criteria.
941
LEGAL
COUNSEL: Thank you. If I could, I would like to ask a couple of
questions related to, I guess, the deficiency question and answer that came in
fairly late in the process. I'm
thinking of your deficiency answers on the 19th of November and I thought I
would start with your answer to question 10.
942
MS. BELL: yes?
943
LEGAL
COUNSEL: Where you say in the second
sentence that the letter deficiency had a small typographical error in both of
the two paragraphs of the condition referred to, Category 3.
944
MS. BELL: That's right.
945
LEGAL
COUNSEL: I'm going to suggest to you
that no, it wasn't a typographical error, that indeed the idea is 35 percent of
Category 3 music and it's Category 3 music for the purpose of both of those
paragraphs. Assuming that to be the
case, is that fine by you? Your first
sentence says, "We would accept the condition as expressed." I am confirming your answer.
946
MS. BELL: I just have to look at this again. Just a moment, please.
947
I understand
what you're saying. Yes.
948
LEGAL
COUNSEL: Thank you. The reason for that of course is that no
condition of licence is needed for Category 2 music ‑‑
949
MS. BELL: I agree.
Yes, I understand.
950
LEGEL
COUNSEL: -- because the regulation has
that.
951
MS. BELL: I understand.
952
LEGAL
COUNSEL: Fine. So we'll confirm that condition?
953
MS. BELL: Yes.
954
LEGAL
COUNSEL: Thank you. Referring for a minute to the same letter,
but I guess the previous page, the last sentence of your response to question 8
says, "We doubt that we would acquire more than 20 hours programming per
week." If the Commission wanted to
impose a condition of licence that would restrict the amount of acquired
programming to no more than 20 hours per week, would you have any problem with
that condition?
955
MS. BELL: We haven't considered that as a condition of
licence. I don't think that it would be
necessary because we have no intention of doing more than that level. I'd like to ‑‑ if we could
just consider that and come back to you in Phase II and confirm.
956
LEGAL
COUNSEL: Along with some of the other
things that you've agreed to confirm in Phase II?
957
MS. BELL: Yes.
958
LEGAL
COUNSEL: Thank you. Can you just give an idea as to where the
Category 3 music comes from in dividing between traditional artists and newer
artists? Canadian Category 3 music.
959
MS. BELL: Del, would you like to take that?
960
MR.
SEXSMITH: Well, the new artists, which
also include Winnipeg talent, would include Walle Larsson, Holly Cole. Some of the artists that are on the more
traditional side, there's some Oscar Peterson.
We have obviously planned that we'll consider many of our new CTD
efforts to qualify as the new section.
David Hasselfield is a local artist who also qualifies, sub-category 3,
jazz.
961
We have
submitted an extensive playlist, so I think we've researched it fairly
thoroughly. We feel there's about 200
or more artists that we can draw material from in this particular area.
962
LEGAL
COUNSEL: Would it be any different
between the daytime and the nighttime?
963
MR.
SEXSMITH: To some extent we would play
more traditional, mainstream jazz in the evening and also on the weekend where
we have specialty program arranged. And
in the morning and daytime, we hope to concentrate on more of the current and
recurrent artists, and in that respect the Category 3 material that is Canadian
will probably be newer.
964
LEGAL
COUNSEL: I take it you feel that there
would be sufficient Canadian material to fulfil all the Canadian content
requirements, both for Category 3 and I suppose Category 2 music, to the extent
you play Category 2 music?
965
MR. SEXSMITH: It's a bit of a stretch, but I think we can
get there. And the ambition is that as
we build up our CTD factors, getting into year three and four in particular,
we'll have more and more material that we've helped to create that we can
broadcast.
966
LEGAL COUNSEL: So as Madam Chair put to you earlier, you
wouldn't be in shortly asking for any relief from any of those requirements, I
take it?
967
MS. BELL: No, and I don't think you'd give them to us
if we did.
968
LEGAL
COUNSEL: Do you have any sense of what
proportion of vocal music there would be to instrumental music?
969
MR.
SEXSMITH: There's quite an ongoing
debate on that. My sense is it's
between 50 and 70 percent instrumental.
One of the keys is, in my review of the Canadian material, there is a
far higher preponderance of vocalists right now that we'd be interested in
playing, and we do want to showcase Canadians.
But I suspect that will change, so the sliding scale, I believe, will be
50 to 70 percent instrumental. Somewhere
in that area I believe it will settle out.
970
LEGAL
COUNSEL: Again, if the Commission
wished to impose a condition of licence imposing a restriction, what level
would you propose?
971
MS. BELL: I would really hope that the Commission
would not impose the condition of licence for the vocal to instrumental ratio
simply because I think it would restrict our ability to program the station to
really meet the needs of the audience and the evolving nature of this music.
972
Jazz has many
forms, and it has evolved through the last 60, 70 years, and I would not want
to have a condition of licence that would prevent us from programming certain
hot new types of music, whether they're vocal or instrumental.
973
So I think that
the best we can do is to say to you we think that it's going to be somewhere
between 50 and 70. It's probably going
to be around 60, to be honest. I don't
think it's going anywhere beyond that.
But we don't think a condition is practical for you or for us.
974
MR.
SEXSMITH: If I could add to that, there
are some very key artists ‑‑ Carol Welsman, Diana Krall and a
few others ‑‑ who are very talented instrumentalists, and we
can't foresee exactly what they're going to do in the future. But if they do play a fair amount of
instrumental material in support of vocal material, I would like to play that
just because I want to showcase the best music and allow them to experiment
whether they want to be at home with the keyboards or instrument or singing.
975
MS. BELL: And one final note on that, Mr. McCallum, as
we've said earlier, we want to create jazz stars. We want to be able to play Canadian jazz stars no matter what
style they're playing. So we just feel
that that would place a restriction on us that just wouldn't be productive for
us or for the Canadian artists.
976
LEGAL
COUNSEL: Thank you. We had a look at the revenue levels that the
different applicants are projecting, and I notice that the Global level of
revenues were the highest amongst the different applicants that we're hearing
in this process.
977
If by any
chance the revenue levels were not achieved, would you have any contingency
plans?
978
MR. NOBLE: Well, the first one is to fire the sales
manager. The only contingency
plan ‑‑ what we generally do, and we're not hitting budget, is
hit the street with more creative different sales ideas. We're running the station ‑‑
proposing to run the station at a fairly low cost, so there's no room
there. So it's just work harder and try
to tap new revenue sources and talk to our friends in television and see if
they can help.
979
LEGAL
COUNSEL: Obviously the first thought
that comes to mind is cutting back on expenses. Would that be an option?
980
MR. NOBLE: It's always an option. But as I said a minute ago, this thing is proposing
to run on a very tight budget. We're
sharing a receptionist. There's not
much to cut back. And again, revenue is
cyclical. If we've guessed wrong, we
might be closer in six months, six to nine months. We'll just weather the storm.
981
LEGAL COUNSEL: Thank you.
I believe in response to one of the questions about the use of another
frequency, in response to Commissioner Williams, I guess the question was, if
there was another frequency, what would the impact be on the business plan, and
the response was it would cost more capital.
And I just wondered if you can elaborate a little bit on why it would
cost more capital if a different frequency were granted to you or you had to
select a different frequency than 99.1.
What are the assumptions underlying the answer which says that it would
cost more capital?
982
MS. BELL: I believe because 99.1, we would be
collocating. If we had to go to another
frequency, there's a possibility that we would have to build another tower. It would cost more money.
983
LEGAL
COUNSEL: Any other possible assumptions
behind the answer?
984
MS. BELL: No, that was it.
985
LEGAL
COUNSEL: Thank you, Madam Chair.
986
THE
CHAIRPERSON: Thank you. You thought you'd get away. No.
I have another question. When
you're talking about your sales force, is it contemplated that if this station
were licensed, it would go into TMG?
987
MR. NOBLE: Not a chance. No, we need a separate sales force for radio.
988
THE
CHAIRPERSON: Thank you. Thank you very much.
989
We'll now
adjourn until 8:30 tomorrow morning.
--- Whereupon the hearing adjourned at 1547, to resume
on Tuesday, February 5, 2002, at 0830 / L'audience est ajournée à 1547, pour
reprendre le mardi 5 février 2002 à 0830
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