- "Licensing of new radio stations to serve Windsor, Ontario
The Commission approves the application by Blackburn Radio Inc. for a broadcasting licence to operate a new FM radio station to serve Windsor. The Commission also approves the applicant’s request for an exemption from the regulatory requirement regarding the level of hit material that may be broadcast.
The Commission approves in part the application by Neeti P. Ray, on behalf of a corporation to be incorporated, for a broadcasting licence to operate a new FM ethnic radio station to serve Windsor. Within 90 days of the date of this decision, the applicant must submit an amendment to the application proposing the use of an FM frequency other than 95.9 MHz (channel 240B1) that is acceptable both to the Commission and the Department of Industry."
In doing so the Commission stated:
- "Although the Commission recognizes that incumbent Windsor radio services would experience some negative economic impact from the licensing of new stations, it is satisfied, based on the evidence set out above, that the Windsor radio market could support the licensing of one new commercial radio station and one niche radio station (one not directed to a mainstream audience) without becoming unprofitable."
- "The Commission considers that Blackburn’s proposal for a local country music station represents a viable business opportunity that would add diversity to the Windsor radio market and that could repatriate Windsor area residents who tune in to Detroit area stations. Further, the Commission notes that Blackburn’s proposal would introduce a new Canadian news voice to the Windsor radio market, and considers that the applicant’s proposed levels of spoken word and news programming would ensure an additional source of Canadian radio programming in Windsor. In addition, the Commission considers that Blackburn’s regional presence would allow for economies of scale in the highly competitive Windsor radio market dominated by CTV. Finally, Blackburn committed to devote, over and above the basic annual contribution to CCD [Canadian content development], a total of $1,001,000 to CCD over seven consecutive broadcast years."
The Blackburn station I believe is going to be known as "WOLF" and will be country music. it will be on 95.9 FM with their website probably being http://www.959thewolf.ca/
- "The proposed station would offer a New Country music format targeting listeners between 35 and 64 years of age, with a core audience 35 to 44 years of age, skewed slightly towards women."
However, the interesting thing to me about the Application by Blackburn was the action of CTVglobemedia to oppose it.
In case you did not know it
- "CTVglobemedia Inc. is Canada's premier multimedia company with ownership of CTV, Canada’s #1 television network, and The Globe and Mail, Canada’s #1 national newspaper. CTV Inc. owns and operates 27 conventional stations across the country, with interests in 35 specialty channels, including Canada’s #1 specialty channel, TSN. CTVglobemedia also owns the CHUM Radio Division, which operates 35 radio stations throughout Canada."
As of today, in our area, it owns the following media outlets:
- CTV Southwestern Ontario (Kitchener/London, ON - CKCO)
- A-Channel Windsor
- CIMX-FM
- CIDR-FM
- CKLW-AM
- CKWW-AM
Now I know why CKLW advocated for a strap-on "W." That commentary about Bloggers that I found offensive personally was probably a subconscious message directed to the management of CTVglobemedia!
Talk about negative whiners and naysayers about Windsor...We Bloggers are mere amateurs compared with the Doom and Gloomsters from CTVglobemedia.
I'm going to set out what was said at the CRTC hearings by the CTVglobemedia people. Compare and contrast what Blackburn media is prepared to do for this area, including the number of new jobs that will be created.
INTERVENTION
2595 MR. ROMAN: And thank you. Good afternoon, Madam Chair, members of the Commission and Commission staff.
2596 My name is Duff Roman, Vice‑President, Industry Affairs for CHUM Radio.
2597 I am joined on my right, your left, by Eric Proksh our Vice‑President and General Manager of our Windsor radio stations. With his 19 years of experience in this market he has become intimately familiar with the challenges of the Windsor radio market.
2598 On my left, your right; is Carrie French, our Vice‑President Business Analysis. Carrie will answer any questions on our market and economic research.
2599 We will now begin our presentation.
2600 CHUM Radio's reasons for opposing the Windsor radio applications are clearly outlined in our written intervention. We are here today appearing as intervenors because, just like the Windsor market itself, these are unique circumstances. We do not believe that the economic conditions within the Windsor radio market can support any new radio stations.
2601 Operating radio stations in the Windsor‑Detroit market has always been a delicate balance. By the late seventies Radio Windsor, then owners of today's CKWW and CIMX FM and Russwood Broadcasting, which owns CKOW and CIDR FM, were losing significant amounts of money.
2602 The Detroit operators of some of the largest U.S. radio players seized every business opportunity, duplicating any Windsor format that showed promise and outspending the Windsor stations on talent, marketing and promotion.
2603 By July 1984 the Commission initiated a special hearing with the Windsor operators, representatives of local business, the Ontario government and the Canadian music industry all figuring prominently. We had spent half the day discussing Windsor as though it was any market in Canada. I vividly recall the hearing being recessed so that all participants could walk out to the parking lot of the Holiday Inn on the banks of the Detroit River where they could all see the looming presence of the Renaissance Centre a scant 1,000 metres away. It was a revelation.
2604 The result was the Windsor Radio Review in which the Commission acknowledged that the environment within which Windsor's stations operate offers special circumstances and that a flexible approach is desirable.
2605 Thus, with some optimism CHUM entered the Windsor market in September 1985 with the purchase of the CKWW and CIMX radio stations. However, even with the unique regulatory approach adopted by the Commission, the de facto small market of Windsor with upwards of 80 percent of tuning going out of market and out of country left both CHUM and Amicus Communications who had acquired Russwood Broadcasting in the interim during the same year, remaining unprofitable.
2606 It was clear that the market could not support two corporate groups and it made sense to consolidate the four radio stations. Consequently, in 1993 CHUM applied to the CRTC for approval to purchase CKLW and CIDR FM.
2607 In a public hearing that was informed by the new directions of the Windsor Radio Review and the stark characteristics of the Windsor radio environment, CHUM was granted an exception to the ownership policy with the approval to operate two FM and two AM stations in the same market. At the hearing CHUM undertook to operate the four stations in four diverse formats.
2608 Today, we operate an All Talk station, an Oldies station, a Triple A station and an Alternative Rock station. It took many years and lots of hard work and innovation but we were able to achieve financial success as an integrated whole.
2609 However, as the Commission can verify, not all of our stations have been able to turn the corner. The success we have had in this market is due to the ability of our stronger stations to support the struggling stations and, in no small way, the flexibility provided by the Commission. This is a delicate balance that could easily crumble with the addition of any new radio stations.
2610 MR. PROKSH: The environment that Windsor radio stations operate in today is much more competitive than it was at the time of the Windsor Radio Review. Now, over 58 U.S. radio signals penetrate the Windsor area. Large and well known U.S. broadcasters such as Clear Channel have seven radio stations in Detroit and approximately 800 across the U.S. and CBS has six radio stations in Detroit and approximately 150 stations countrywide.
2611 A simple statistic demonstrates the unique channels of the Windsor market. Canada‑wide only 3 percent of total tuning is to U.S. stations. In Windsor this number increases to 50 percent, whether we like it or not the practical reality of operating a radio station in Windsor means competing against large, well‑financed and unregulated Detroit radio stations.
2612 We are operating in a radio environment comprised of 64 radio stations of which only six are regulated by the CRTC. And it remains the case today, as it was in the 1970s, that Detroit stations will duplicate a Windsor format that shows promise and use their resources to outspend our stations on talent, marketing and promotion.
2613 The realities of the Windsor market have meant that if we are to be competitive and attract as many Windsor listeners as possible, we have needed to take a different approach for this market than the other local communities which we serve. Windsor and Detroit are homogeneous markets and to be competitive we need to recognize the impact that Detroit stations have on the Windsor stations. There is no border on the radio dial. If the listeners like the programming, no matter where it originates, they will listen to it.
2614 The truth has long been recognized by the Commission, first, in the Windsor radio review and in the Commission's subsequent decisions relating to the Windsor market. Moreover, our experience in Windsor has shown that it is the only way to succeed and be competitive in a radio environment that is inundated with 58 American radio signals.
2615 MS FRENCH: I want to turn now to Blackburn's analysis that the impact on the incumbent stations in the market would be minimal if the Commission were to licence their proposed station.
2616 First, the revenue of the Windsor radio market has been considerably over estimated. And starting with over‑estimated numbers for the market has lead to over‑estimated revenue projections for the proposed station.
2617 Second, if as Blackburn says in one part of their application, the minimal impact on CKLW will be two share points, that equates to half a million dollars. We don't regard that impact as minimal.
2618 Third, referencing the BIA Report for the Detroit market Blackburn states that Detroit is a much more robust radio market than Windsor. However, the report actually says:
"The Detroit radio market will have seen a decline in revenue of about 16 per cent from 2004 to 2009." (As Read)
2619 This does not meet the definition of robust.
2620 MR. ROMAN: While Windsor and Detroit's highly integrated media market is one reality of operating radio stations in Windsor, the other reality that must be heeded is Windsor's economic dependency on Detroit. This fact is demonstrated by the automotive industry, an industry that is shared by both Windsor and Detroit.
2621 Windsor, known as the automotive capital of Canada, is home to the headquarters of Chrysler Canada. Chrysler stopped producing the Pacifica in late November. The Ford engine plant closed its doors in the same week. The GM plant operates with minimal staff and may not be open much longer. The trickle‑down effect of these closures will have a negative impact on the tool and dye shops and automotive parts manufacturers located in Windsor.
2622 Windsor's reliance on the automotive industry as a major employer means that any downturns in this sector have a tremendous effect on the city's economic health.
2623 Recent news headlines have highlighted the troubles in the automotive sector. The big three automakers slashed their North American output by roughly 1.9 million vehicles over the last three years. And right here in Ontario, according to Ward's Automotive Reports, output is expected to slide by a further 600,000 vehicles over the next five years.
2624 In addition, almost 6,000 jobs have disappeared in the first seven months of this year alone. Last week, the front page of the Windsor Star carried the headline "City's Outlook Called Bleak." The CIBC World Markets report ranked Windsor as having the worst economic outlook of Canada's two‑dozen largest cities, citing downturns in the local manufacturing sector and a weakening U.S. economy. Windsor is facing major challenges.
2625 This economic reality must be taken into account in determining whether the Windsor radio market can absorb the impact of a new station. We recognize that the Commission has recently licensed stations in markets that were less than robust. But when it did so, the potential future growth of those markets played a major role in those decisions.
2626 And what works in other Canadian markets does not work in Windsor. Other Canadian markets do not consist of 64 radio stations where 58 are out of country competing for the same audience that our stations serve. The Commission has long understood that reality and reflected in their Windsor‑related decisions.
2627 In conclusion, we believe that the Commission should deny the applications before you for the following reasons. First, the highly integrated radio market of Windsor and Detroit which had been recognized and accommodated by the Commission must be taken into account in assessing whether the market can absorb the impact of any new radio stations.
2628 And, second, the applicants' overestimation of the Windsor radio market revenues has lead them to overestimate projected revenues for their proposed stations. The facts don't support their projections.
2629 Third, the Windsor radio market is economically challenged, Michigan's economy is in a slide, Michigan has one of the highest levels of unemployment in the United States and, as the largest city in Michigan, Detroit is also suffering.
2630 All these factors lead to the inescapable conclusion that the current conditions are not right to licence any new radio stations.
2631 So we would like to thank the Commission for the opportunity to appear before you today and we welcome any questions you might have.
2632 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues.
2633 So if I hear you correctly, what you are telling us to do is to continue to look at Windsor in a unique way, to not look at Windsor as simply a market where one broadcast group owns four radio stations, period, but rather to look at it as a market where one broadcast group owns four radio stations and competes with 58 stations across the border. Which, I do have to concede, as a radio listener, is unimaginable to me that I would have a choice of that many radio stations.
2634 But that is essentially your position, correct?
2635 MR. ROMAN: (nodding)
2636 THE CHAIRPERSON: Okay. You did say in your oral presentation that we have taken a unique regulatory approach to the Windsor market and we should continue to do so. CTV has been able to take full advantage of that unique regulatory approach in the conditions of licence of your radio stations in this market.
2637 You also say that in your written intervention, you certainly repeated it today, that if we were to grant Blackburn their request it would not be in compliance with our common ownership policy.
2638 Why shouldn't we take a unique regulatory approach to the common ownership policy in Blackburn's case as well?
2639 MR. ROMAN: Well, first of all, I think that the history and the trail that has lead from those early days in Windsor‑Detroit to the Windsor radio review onto the groundbreaking decision that allowed CHUM at that time, now CTVglobemedia, to own four stations is a lesson that really isn't that remote. We do a very delicate dance.
2640 We promised to undertake that we would operate four stations. The discussions those days would be close the unprofitable ones, for instance, CKWW. And there was some other discussions that were undertaken and we took a solemn position, not a condition of licence, but an expectation that we would maintain four diverse services.
2641 Today, we have one essentially break‑even FM, we have an AM that has continued to lose money, we have an AM and an FM that are essentially carrying the freight. Our suggestion to you is that now is not the time to upset that delicate balance, the economic conditions are right. And considering an exception to the rule, we think that the timeliness is not there. That what you have constructed ‑‑ and this is a great success story in my opinion ‑‑ is still very fragile.
2642 And, if I may, we don't operate in a market with infinite horizons. We are in a situation where we have to operate in niches, it is like Whac‑a‑mole. The minute we raise our heads above sea level a competitor in Detroit will duplicate the format and take it away.
2643 And I think I could have Eric maybe even discuss some of those situations that we have had to deal with where we get to a 4 or 5 per cent share and someone comes in unregulated and simply takes it away. That is a reality that won't go away. We can't keep growing the market, we can only take it to a certain finite level and then that 58‑station competitive factor kicks in very big time.
2644 THE CHAIRPERSON: But before we do that and just so I don't lose this track, you said the economic conditions, currently, do not grant the conditions necessary for an exception ‑‑
2645 MR. ROMAN: Yes.
2646 THE CHAIRPERSON: ‑‑ to the common ownership policy. We have heard from the Blackburn applicant that it is a blip and that Windsor goes through this all the time, it is cyclical, the economy in Windsor can be buoyant.
2647 Are you, therefore, suggesting that if the Windsor economy does improve then that would be the time at which we could look at an exception to the common ownership policy?
2648 MR. ROMAN: Depending on the depth of improvement, I would suggest to you that that would be the appropriate time for re‑examination of allowing a new entrant into the Windsor market, yes.
2649 THE CHAIRPERSON: I mean, CTVglobemedia is a big enough company that it can adjust or it can react to the kind of economic conditions that we are talking about as well as the changes in format from the U.S. stations. Is that too big of an assumption for us to make?
2650 MR. ROMAN: Well, I think that we look at all of our markets as, hopefully, being able to pay their own way and carry the freight and, certainly, Windsor is no exception. And, for us, the fact that we are able to maintain four discreet services is because we have the strong stations supporting the weak stations.
2651 So are we big enough? How long would we want to carryon with that? I mean, these are questions I think we grapple with every quarter of every fiscal year in terms of what we ourselves are going to do with this economic downturn in Windsor‑Detroit. It is a real issue for us and it is just really starting to kick in now. And the probabilities don't look good on the horizon that it is going to be a short‑term thing.
2652 I mean, plant closures are different than layoffs. And with the automotive industry under attack and heavy pressure, these are sea changes that are going through a major fundamental backbone industry to the Windsor economy. So I think both the regulator and the licensees are going to have to look very carefully at how they deal with this situation as it evolves.
2653 THE CHAIRPERSON: Now, you consider the Blackburn station out of Chatham to be a Windsor station essentially.
2654 MR. ROMAN: For all intents and purposes, yes.
2655 THE CHAIRPERSON: For all intents and purposes. And you have the same view of their Leamington station? I know that their Leamington station does come into the Windsor market, but it does not have the same conditions of licence as their Chatham station does.
2656 MR. ROMAN: Well, I would ask either Carrie or Eric to respond in terms of how Leamington impacts us in Windsor.
2657 MS FRENCH: Well I think, Madam Chair, it has been a recent development that the programming on Cheer has been directed towards Windsor. They do sell within the market, they do advertise for listeners within the market and they sell as a Blackburn combination of two stations in the market.
2658 So it is an everyday reality that we deal with, both with our audience and with our advertisers. So I think an illustration of the fact that it is being considered a Windsor station is in the software that most sales people in Canada use for radio is called air ware, both Blackburn stations are included in the Windsor market. And when you are not an originating station, you have to pay extra to be included.
2659 THE CHAIRPERSON: So obviously, what you are saying it is important enough for them to be included, that they pay to be included?
2660 MS FRENCH: Absolutely.
2661 THE CHAIRPERSON: Okay, thank you.
2662 Do my colleagues have any questions?
2663 Commissioner Menzies.
2664 COMMISSIONER MENZIES: You used the adjective unregulated when you referred to the Detroit stations and their stealing of formats and that sort of stuff. Is it the regulation that keeps you from competing in the Windsor‑Detroit market?
2665 MR. ROMAN: Well actually, it is the CRTC's flexible regulation that does allow us to compete in the Detroit market. We operate at 20 per cent Canadian content, we have a realistic spoken word requirement, and it allows us to operate in niches. So we can take a certain format to a particular level I think by very intelligent programming.
2666 But as it reaches a certain share point of say 4 or 5 per cent, it is then that the American stations take notice of us and they simply say, well, there is something that is showing some success, why don't we go after them by playing anything that we choose to play rather than having to make sure that you accommodate 20 per cent or 35 per cent Canadian content.
2667 It is a war of attrition. It won't show up in the first day or the first week, but certainly there has been a monumental change in the way Windsor's radio history was shaped with The Big Eight when it was incorporated into the Canadian content regulations. And that was the beginning of the corporate difficulties we had when the stations in the U.S. realized at that time these relatively unknown records, it was a very fragile music industry at the time, were occupying 30 per cent of their play list. It took them about 18 months, but they basically pushed them right out of that niche.
2668 COMMISSIONER MENZIES: Thank you for that. But what I am trying to get at a little bit is if you didn't even have the 20 per cent would you be able to compete or would it still not be manageable?
2669 MR. ROMAN: Well, if we had the same level playing field as the Americans, we would put ourselves up against any of them, yes, absolutely. I mean, essentially, there are things that would characterize us as a Windsor station, our local service to Windsor. But in areas of being able to present what is required in terms of our play list, its assembly, where we go with it, I think that it probably would always have a very very significant amount of Canadian talent because the music industry has matured and is providing some really great records.
2670 But the difficulty, and I don't know if you want to go there Mr. Menzies, but is that we have to do this week in and week out. Some weeks there are all kinds of new Canadian releases, but then we will have weeks where there are none. But the quota system requires you to always play, whether it is 20 per cent in Windsor, 35 or 40 per cent in the rest of the country, and those are the challenges.
2671 And what happens is if you dropped in on an unregulated player or 58 unregulated players, then you get a situation where they can gang up on you or they can target you directly, and it doesn't happen overnight, but eventually it does have its effect.
2672 COMMISSIONER MENZIES: Okay. And I am just trying to get my head around ‑‑ Blackburn is comfortable with 35. And I have got information from you that says 20, especially the way it is done on a weekly basis, is a bit of a tight collar. How do you suggest I view that difference in perspective?
2673 MR. ROMAN: Well, I think that I will ask either of my colleagues to address here. But what we think will happen is that the Windsor market, as I say, has finite limitations, it can't grow above a certain level. Because what happens when you get to a certain level is that you attract the attention of major competition, is that we will all be winding up eating from the same table, we will all be winding up in a situation where we will have to take the advertising wherever we can take it.
2674 And whether it is 35 per cent with a station with low overhead coming into the marketplace and filling a perceived niche, we will windup going after, I think, a lot of the same advertisers.
2675 And I would ask Eric to comment on that.
2676 MR. PROKSH: I don't have much more to add, but I think the same is true, we will probably end up cannibalizing the Canadian advertising in Windsor. As Duff pointed out, not all of our stations are profitable at this time. And to have a new player in the market, it is hard for me to realize that that wouldn't happen.
2677 COMMISSIONER MENZIES: But you sell advertising in Detroit, right?
2678 MR. PROKSH: Yes, we do.
2679 COMMISSIONER MENZIES: And I am sure it is here someplace, but just remind me what percentage of your revenue that is?
2680 MR. PROKSH: It varies by each station, but our total revenue would be approximately 40 per cent in the U.S. But we do have separate rate cards. The U.S. is a much more expensive market, being in the top 12 or 13 largest markets in the U.S. The cost per point in that market is substantially higher than in Windsor and we have a much lower rate card for Windsor.
2681 COMMISSIONER MENZIES: So U.S. advertisers are subsidizing Canadian advertisers more or less on your station?
2682 MR. PROKSH: If you want to put it that way. They pay the market cost that is relative to the Detroit market in Detroit.
2683 COMMISSIONER MENZIES: Okay. Thank you.
2684 MR. PROKSH: Thank you.
2685 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues, thank you for your intervention here today.
2686 MR. ROMAN: Thank you for your time.
2687 THE CHAIRPERSON: Madam Secretary.
2688 THE SECRETARY: Thank you, Madam Chair.
2689 This concludes Phase 3.
2690 We will now proceed to Phase 4 in which applicants can reply to all interventions submitted on their applications. Applicants appear in reverse order.
2691 We would then invite Blackburn Radio Inc. to come forward to the presentation table if they wish to participate in Phase 4.
REPLY / RÉPLIQUE
2692 MR. COSTLEY‑WHITE: Good afternoon, Madam Chair, members of the Commission and Commission staff.
2693 My name is Richard Costley‑White. I am here with the colleagues I introduced in Phase 1, they are Terry Regier, Walter Ploegman, Sue Storr, Rod Martens, Lori Baldassi, Jason Ploegman, Carl Veroba, Debra McLaughlin and Mark Kassof. We are here present our reply to the interventions to our application.
2694 The supporting interventions, the research studies we presented, our experience in Windsor and recent announcements by public officials present a much different view of the market than does Canada's largest private broadcaster.
2695 MR. REGIER: Much has been made of the recent economic difficulties in Windsor, including the Windsor Star report on CIBC's rating of this market. This news is a matter of concern to all of us Winsorites.
2696 Every Wednesday, The Rock invites the Mayor of Windsor on air to talk about the city. Last week our host asked him about the CIBC article and here is a part of his reply:
"So, yes, we are going through a perfect storm, we've been through storms before, absolutely. Will we come out of this one? Absolutely. We have strengths that we did not have before. We have a well‑developed, skilled workforce, we have a very important and critical tourism facility that is being built right now and that's the convention centre on the new Caesars property. So we have the best location, we have the tools and we have the strengths and we'll be positioned to come out of this stronger. But it's going to be hard for the next little while and that's something that everybody in Windsor I believe, and in this county ‑‑ it's not just Windsor, but it's in the entire region, it's something that everybody in this region I believe understands and is going through right now." (As Stated in Audio Presentation)
2697 MR. REGIER: We have provided you with a CD of the complete interview. The Mayor agreed that we have been through some tough times, but notes the difference with past economic downturns.
2698 Windsor has put in place structures to diversify our economy. CTVglobemedia stated in their written intervention, at paragraph 32, they believe and I quote:
"It is strategically necessary to treat Windsor and Detroit as a homogenous market." (As Read)
2699 They obviously don't agree with the 72 per cent of those who think Windsor is a unique market. Windsor and Detroit are different cities with different demographic, economic, social and cultural make‑ups.
2700 CTV provided a series of band news clippings to support their thesis. What they ignored is a diversification that happened over the years and some of the recent good news. Windsor's bond rating was raised from AA minus to AA, as reported in the Winsor Star on November 20.
2701 Data from the Canada employment office demonstrates that each job lost in the downturn is replaced by at least one new job. Per household income has increased at the same rate as the rest of Canada from 2004 to 2007 according to FP Markets.
2702 The CMI report filed by CTV notes that the Conference Board predicts growth for 2006 and 2007, minimal growth, but growth nonetheless. And the projections for the years 2008 and later are for more significant growth.
2703 I would like to ask Debra McLaughlin to add further comments here.
2704 MS McLAUGHLIN: Much of the focus of the discussions on the economics around this process has been on where Windsor has been. I think the focus is properly placed in the future.
2705 According to the Conference Board winter 2008 data from second quarter 2008 and onward GDP is projected to be positive. Despite the downturn in the automotive sector, growth in personal income in 2007 is expected to be positive, evidence of diversification.
2706 Further, growth in income is to rise to 4.2 per cent in 2008 and by 2009 be 3 per cent. This growth feeds the positive retail sales we discussed earlier. A balanced look at Windsor's economics would reveal a difficult current situation, but a future that is characterized by growth and not prolonged decline.
2707 Rod.
2708 MR. MARTENS: CTV suggests in its written intervention that the situation today is worse than it was in 1984, more U.S. stations with a "detrimental impact on the amount of tuning and revenues that Windsor stations garner." This is a misread of the actual situation.
2709 In 1984, Detroit radio stations dominated tuning and all four of the radio stations in Windsor were losing money. At that time the commercial Windsor stations received a total of 20 percent of hours tuned.
2710 In the fall 2007 BBM ratings, Canadian private radio stations received 37 percent of all hours tuned.
2711 In Decision 2003‑603, the Commission stated that the four then CHUM‑owned stations had been growing in revenues and profitability since 1999 and that their PBIT margins had exceeded the national averages for each of the previous three years.
2712 CTVglobemedia states that national advertisers do not want to buy Windsor stations since there is not enough reach by Canadian stations to justify this.
2713 Commissioner Menzies noted Windsor is hard to buy due to all the stations but Canadian advertisers cannot buy most of these stations since Detroit rates are four times that of Windsor.
2714 CTV's prescription is not to license more players in the market but we would suggest a market‑driven strategy: License more Canadian stations, aggregating Windsor audiences, and we will reach the required critical mass.
2715 Our own experience would seem to indicate that this kind of strategy works.
2716 In the spring of 2004, before The Rock provided a reliable signal in the market, private commercial Windsor stations received a 35.9 percent of all hours tuned 12+.
2717 A year later, in spring 2005, after the launch of The Rock in the market, the total hours tuned 12+ grew to 39.3 percent.
2718 The difference was above and beyond The Rock's share. In other words, the entry of a new station meant growth in total tuning to Canadian stations.
2719 MR. REGIER: CTV also makes a number of contradictory arguments.
2720 At one point in their written intervention they indicate that Blackburn has no experience in the challenging Windsor market and only they know what it takes but elsewhere they claim that our part‑time Windsor repeater CKUE and our out‑of‑market Leamington station CHYR have had an impact on their business.
2721 Put differently, we don't know what we are doing but somehow we are hurting them. In act, we have operated successfully in markets with multiple U.S. signals and know the trick to winning: local service and attention to your home market.
2722 We are not hurting them in Windsor. As demonstrated in our written reply, the only reason their four stations' combined share is down is that they switched from an AC format in Windsor to go triple A because of low ratings in Detroit.
2723 CTV indicates that their fear is that we will fail in the country format and then switch formats to come after one of their stations. We are very confident that we will succeed in the country station in Windsor.
2724 The Kassof research is clear. We have the potential to draw 7 percent of hours tuned in the market with a country station. Our decision was to be cautious and so we built our business plan and we built it on a modest 3 percent of tuning in our first year of operation and only reaching 8 percent by the seventh year.
2725 The U.S. country stations drew 9.6 percent of hours tuned in the spring of 2007 and we are confident we can repatriate a significant portion of these hours.
2726 We have done this before in Windsor. Before The Rock launched in 2004, U.S. mainstream rock stations drew 12 percent of hours tuned in Windsor. In the fall of 2007, The Rock drew 4.8 percent of hours tuned in Windsor and was the highest‑rated mainstream rock station in the market. Detroit rock stations drew a 5 share in points, less than in the spring of 2004.
2727 But even if we did stumble, why would we chase after their formats? The Kassof research shows that there are a number of format opportunities in the market, mainstream AC, the format abandoned by CIDR, despite shares as high as 8 percent of 12+ tuning in the Windsor market.
2728 At one point in their written intervention CTVglobemedia indicates that there should be concern because the Detroit radio market is in decline and Windsor stations will likely see less revenue from the Detroit advertisers.
2729 The implication seems to be that Canadian listeners in Windsor should have fewer local radio choices because CTV might not be able to draw as much money from Detroit as in the past.
2730 Madam Chair, members of the Commission, Canada's largest broadcaster, with four radio stations in the Windsor market, two regional television stations and an impressive stable of specialty services, came to you asking to continue to be sheltered not from the Detroit giant but from Blackburn Radio Inc., one of the decreasing number of regional broadcasters.
2731 MR. COSTLEY‑WHITE: I would like to thank the interveners who wrote in support of our proposal. They include musicians who spoke to the support our Windsor Rock station provides and the need for a local country station. Community service groups spoke of the support that The Rock has brought to them and advertisers spoke of the need for new advertising choices.
2732 I would particularly like to note the comments from intervener Pat Lewis of the Windsor Department of Parks and Recreation who noted our involvement in the city's regional economic assembly to review new initiatives for the local economy.
2733 Madam Chair, we have argued strongly that the market can sustain a new station now and that the growth in the market will ensure viability for all stations in the future but let us consider for a moment what will happen if we are wrong.
2734 Either Blackburn will lose money and/or CTVglobemedia will feel a certain amount of impact.
2735 We are entering this market with our eyes wide open. We are willing to risk a substantial investment and we are not asking you to protect us from this risk.
2736 If CTVglobemedia takes some impact, which we doubt, Canada's largest broadcaster is well positioned with four local radio stations, two regional television stations, the most successful private conventional television network in Canada and a stable of very profitable specialty stations, they are well positioned to weather any storm.
2737 Among the consequences of denying this application are no new programming choices for Windsorites, no new editorial voice in the city, no exposure for Canadian country artists in this major market and the loss of over $1 million in CCD to the system. We think this would be a shame.
2738 We feel that a key to helping a community undergoing difficult financial times to recover is to invest in it. Blackburn Radio wants to make a large investment in Windsor's recovery.
No comments:
Post a Comment