New FM stations signal more change in local radio market

Regulatory approval opens way for launch of Vancouver and Surrey specialty channels

South Fraser Broadcasting owner Sukhvinder Badh: “[Surrey residents] also felt the Vancouver stations give Surrey a priority only during drug busts, murders and other criminal activity”

The Lower Mainland radio market is poised for a shakeup as soon as next winter after new commercial FM stations targeting Vancouver and Surrey got the regulatory green light on August 6.

The Canadian Radio-television and Telecommunications Commission (CRTC) approved bids by 0971197 B.C. Ltd., dba Roundhouse Radio, and South Fraser Broadcasting Inc. Roundhouse proposed a specialty FM station at 98.3 FM for the city of Vancouver with an 80% spoken word, 20% music ratio that is “hyper-targeted” to downtown.

South Fraser's My Surrey FM at 107.7 FM will carry an adult contemporary music format with local news, sports and weather. Both low-power signals will spill over to neighbouring municipalities, but the stations will also stream live on the Internet.

They were among 11 applicants for new stations that appeared at a January 27 CRTC public hearing in Vancouver. Both have a two-year window to launch, but could be on air in six months.

“In the short term, it's nothing but good news for media buyers and planners and good news for advertisers any time there are new options to consider,” said David Stanger, president of Langley-based media buying agency DSA Media Network. “I think once the dust settles it will be very interesting to see the long-term sustainability.”

In 2013, the 20 commercial radio stations in the Metro Vancouver radio market recorded total revenues of $124 million, representing a slight decrease of 1.6% relative to the prior year. Nonetheless, on an aggregate basis, the Vancouver radio market's profitability remained strong in 2013 with a profit before interest and taxes margin of 24.1%, up from 22.8% in 2012.

The CRTC consequently ruled that the Metro Vancouver radio market could support two new stations without harming incumbent services.

Roundhouse received strategic advice from former CKNW producer Shirley Stocker, former Global, CBC and CHEK news anchor Tony Parsons and Kirk LaPointe, the print and broadcast media executive seeking Vancouver's mayoralty for the NPA. (See “A fond farewell to St. Pierre and the glory days of dailies, CKNW” – BIV issue 1293; August 12–18.)

Roundhouse's CEO is veteran radio programming executive Don Shafer, who said the group was “a little overwhelmed, humbled, shocked” by the decision, but it was not pausing to celebrate.

“We have to secure a lease for our rooftop antenna and transmitter, we have to secure offices, we have to buy equipment, we have to obviously find the right people who can breathe life into our application,” Shafer told Business in Vancouver. “We have to establish contact with all the community groups, all the different downtown business associations and start working the streets.”

Shafer declined to discuss the application costs and startup budget.

Although CKNW AM 980, News1130 and CBC 690 AM/88.1 FM also compete for news and talk radio listeners, “only a small amount of their content is generated or focused for the city of Vancouver, people who live, work and play in downtown Vancouver,” Shafer said.

South Fraser owner Sukhvinder Badh, a Simon Fraser University and Douglas College economics instructor, said the My Surrey FM proposal cost $500,000 and it could cost another $250,000 to $500,000 to get the station operating.

He said the key to the application's success is Surrey's lack of an English-language station. An estimated 94% of residents in B.C.'s second-largest city understand English. Smaller markets like Halifax and Regina boast multiple radio stations.

“[Surrey residents] have their own separate tastes. What they really lacked, the research pointed out, was they wanted something that would talk about Surrey first and Surrey always,” Badh said. “They also felt the Vancouver stations give Surrey a priority only during drug busts, murders and other criminal activity. They figured that their Surrey has more to offer than what the Vancouver stations are labelling Surrey as.”

Stanger said it will be vital for both new stations to launch and sustain unique programming to captivate listeners and advertisers.

“The downtown station, the challenge they have is to be relevant to the people that live downtown, and I'm not at the moment convinced that radio is the go-to medium for most people that live downtown,” Stanger said. “The Surrey station, the news and information may be aimed at a Surrey market, but if the music they play is the same as four other Vancouver radio stations, eventually they're going to be in a ratings and price war with the stations that play the same music.”