Toronto radio licence goes to the little guy

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A small-time radio operator from Barrie, Ont., has been handed one of the most sought-after media assets in Canada: a rare open frequency on Toronto's crowded but lucrative FM radio dial.

The Canadian Radio-television and Telecommunications Commission on Tuesday said Rock 95 Broadcasting Ltd. – which operates just two stations in Canada, both in Barrie – had won the right to broadcast at 88.1 FM in Toronto after Ryerson University's campus station was stripped of the frequency last year for repeated licence violations.

Rock 95 beat out more prominent players, including Newcap Inc., the Canadian Broadcasting Corp. and Moses Znaimer, as well as Bay Street trading legend Mike Wekerle.

Its "Indie 88.1" will specialize in independent music, playing 60 per cent selections from emerging artists and 40 per cent Canadian content when it hits the airwaves in the next year.

In total, 22 applicants made their case in hearings before the CRTC earlier this year.

With its decision to favour a small player, the regulator is gambling that its push to diversify radio ownership in a fast-consolidating industry won't end in embarrassment again, after several licences awarded to small players were flipped in recent years for big profits.

The temptation will certainly exist: BCE Inc. paid $27-million for low-rated Flow 93.5 FM in 2010, while more successful Toronto stations are worth upward of three times that amount.

But Rock 95 owner Doug Bingley said in an interview he has no intention of selling. "All my life [radio] has been a love for me," he said. "This is part and parcel of who I am. So why would I sell it? I can see a lot of opportunity in the future with this."

Rock 95's plans are modest: It is aiming for a 3-per-cent share of the Toronto market – which would place it out of the top 10 – and less than $5-million in annual revenue after seven years.

"If we are too broad-based and try to do what other stations are doing, we'll be killed." Mr. Bingley said. "We have a niche format and will still attract enough listeners to be commercially successful."

Industry observers said Mr. Bingley faces a tall order. "Independent music has been tried and tried," said Greg O'Brien, editor of Cartt.ca, an online trade journal for the broadcasting business.

"It's just not a format that is conducive to mass market radio. They have a tough business case ahead of them. In a few years, the station will probably be switching formats."

Mr. Bingley said he believes the time is right for an independent music station, particularly with changes in the music business that have seen more emerging artists succeed by reaching fans digitally, despite lacking a natural home for their music on conventional radio.

"People are tired of hearing the same songs over and over on the radio," he said.

The licence award also comes at a time when the radio business is posting growing revenues and profits, and holding its share of advertising dollars, as other media decline in the face of growing challenges from the Internet.

The CRTC decision is expected to precede a further shakeup in Toronto, as BCE will sell two of its FM stations if it completes its takeover of Astral Media Inc.

For Mr. Bingley, it is the second time he has upset established industry players to win a station.

The 59-year-old Toronto native applied for his first station in Barrie in 1986, when he was a sales manager with Bell Canada with no radio experience other than his hobby as a ham radio operator (which he continues to this day).

"I went to a hearing, saw what was going on and said, 'I'll take a shot at this' – and we won," Mr. Bingley said of his first application. "So history has repeated itself."