IT MIGHT SURPRISE SOME to learn that one of the fastest growing Canadian media companies is not some sexy, new media, web based disruptor, but in fact built on the oldest electronic media we have: radio.
In about nine years, Vista Radio has grown from a single station in Duncan, B.C. to a national power with over 60 stations spread from the west coast to Ontario. It really jumped in size in 2012 when it agreed to purchase Haliburton Radio and its 24 Ontario stations for $32 million (backed by Westerkirk Capital, an investment arm of the powerful Thomson Family). Despite the company’s disdain for large market radio (it’s biggest single market is Niagara/St Catharines), Vista has grown quickly into a major player – and not without some growing pains.
So why would a career lawyer (who has signed off on some much bigger deals during in her working life when she was a senior counsel at Shaw Communications) decide radio is the best place to invest? What are the most pressing, of many, challenges her company and the radio industry will face now and in the future? Micallef (this year’s Canadian Women in Communications’ Woman of the Year) sat down recently with Cartt.ca editor and publisher Greg O’Brien for a chat. What follows is an edited transcript.
Greg O’Brien: When you first got the first station in Duncan, B.C. (89.7 Sun FM, a Hot AC station serving the Cowichan Valley) is this what you had envisioned?
Margot Micallef: Yes, pretty well. What happened is before we actually closed on the Duncan station, (Vista co-founder) Paul Mann and I had a conversation and we agreed that if we were not able to grow by at least five radio stations within the first 12 months of operations that we would sell the Duncan station. That was a pre-condition of me going in on the deal.
I got more involved with the acquisitions after we closed on the Duncan station, then we went underground and started negotiating and looking for other radio stations to buy. We closed on the Duncan station in February, 2005, and by August, 2005 we had deals signed, and in many cases closed for another 30-odd licenses.
GOB: All out at west at that point.
MM: All in B.C. Then subsequently we got a license from the CRTC for Grand Prairie, then for Kelowna. Subsequent to that, we bought Lloydminster and Bonnyville and then since then we also bought Medicine Hat and Yellowknife.
GOB: You’re no stranger to mergers and acquisitions. I mean that was part of your role when you were at Shaw, correct?
MM: Correct. I actually started out in life as a lawyer at a law firm in Vancouver and did mergers and acquisition work – partly for broadcast clients, partly for other clients. Then when I went to Shaw, we did, of course, billions of dollars worth of transitions. And I was the senior V.P. in charge of that.
GOB: I remember the names and the signatures at the bottom of the big Rogers-Shaw East-West system swap in 2001 and your name was on the deal if I remember correctly… I’ve been covering this industry for a long time, since ’97, so I’ve seen a few things happen.
MM: It’s changed a lot.
GOB: And the Manns, they were broadcasting and cable, too right, the Okanagan Skeena Group?
MM: Yes. I actually used to be the lawyer for Skeena Broadcasters That goes back to 1986, I think. Skeena Broadcasters then merged with Okanagan Holdings, which was a real estate company, not broadcasting, to become Okanagan Skeena Group and then went on of a bit of an acquisition spree. I did the bulk of the acquisitions for them when I was a lawyer at Russell Dumont in Vancouver. (Co-founders) Brian (Edwards) was involved with that, Jason (Mann) was involved with that, Paul was involved with that, Barb (Fairclough) was involved with that.
Then subsequently, Okanagan Skeena was sold to Telemedia and Chris Lecomte, who’s our CFO, was involved with Telemedia. Dave Calder, who’s involved with us on digital was involved with Telemedia. So… what goes around comes around. The more things change, the more they stay the same.
GOB: What are the goals for Vista? How big do you want to get?
MM: We don’t have a finite number in terms of size. We’ve always said we want to be the preeminent broadcaster in Canada and that doesn’t necessarily mean just size. It also means the broadcaster that truly is the locally focused broadcaster in the communities that we serve, because a lot of people talk it, not everybody does it. We want to be the employer of choice for people in the broadcasting industry.
We want to be the medium or format or platform of choice for advertisers and part of that includes size. You have to be a certain size to attract good people, a certain size to be able to afford the ability to innovate and accommodate what the consumers and advertisers are looking for. But some of it also is attitude and culture and philosophy and how we operate. It’s going to be a combination.
GOB: Why would you get into radio to begin with? There are lots of other investment opportunities. Lots of other different media you could get into. Radio, as I said during our Canadian Music Week panel session is not the shiniest media tool in the shed. What attracted you to radio and small market radio in particular?
MM: They say that the most important decisions in our life are usually made when we are least capable of making those decisions. That was true for me becoming a lawyer, for specializing in broadcasting and some of the other decisions I made when I was really young.
I went to law school because I didn’t know what else to do and I ran into a friend who had just been accepted to law school. And so spur of the moment when my mom asked me one evening what I was going to do… I said I’m going to go to law school. So I went, not knowing what I was getting into, got a job with a law firm, ended up doing some legal work for Skeena Broadcasters, fell in love with radio broadcasting and the rest is history, as they say.
Why I invested in Vista and wanted to pursue that strategy is really because I believe that the point in life is to make a difference, and I believe that we can make a difference through radio broadcasting and the communities that we serve.
GOB: When you say make a difference, can you expand on that?
MM: I want to leave the world better than I found it, whatever that might mean, and I think that can be done on a micro level, not just on a macro level. I see how important radio is to the communities that we serve, the smaller and mid-size communities and it’s very gratifying to be able to make a difference in a positive way in those communities. Often times the markets that we serve don’t have a local TV station, don’t have a daily newspaper, and we are what connects people within the community, to businesses, to what’s going on in town. We really help shape the culture of the community.
GOB: I worked in community media years ago where the weekly newspapers that I worked for were the only media in the little towns. There was no local radio, no local TV, because we were too small and too close to Windsor and Detroit. There was the Windsor TV station that covered the entire region, and the there was the Detroit/Windsor radio stations. There was no radio out in the counties where I worked so if you wanted something publicized in town, it was the Tilbury Times and Belle River News every Wednesday. That’s what you had to wait for.
MM: I remember those days. I lived in a small town when we were growing up where we didn’t have a local radio station either. I remember listening to the radio and it was all information about a town that was about an hour and a half away from where we lived. It was quite disconcerting not to have something that connected us to what was going on in our own town because the local newspaper came out once a week. So the immediacy of radio is so powerful.
GOB: Is that why you’re still bullish on the radio sector in general?
MM: If radio is done properly, it’s very locally focused. There are so many ways to get information now about what’s going on, I always say, from Afghanistan to Zimbabwe, but very few platforms or ways that you can get very relevant, timely information about what’s going on in your own community. Radio is the perfect medium for that.
GOB: What about taking your radio brands and expanding them into a more local news portal, taking a lot of the stuff online?
MM: We’ve already started that with our HQ community portals where we take a lot of good content that we have on our radio stations and expand it for the HQ portals. We’ve had quite a bit of success with that and that’s very much a focus for us. The idea is that a brand is no longer a narrow service offering. People want to enjoy that brand in a number of different ways and for broadcasting, that means in a number of different platforms.
GOB: You have the HQ portals, the radio station portals and of course the stations themselves, so when you go to the market and sell those to advertisers, are they sold together or separately? All-in buys?
MM: It’s evolving. We’ve tried a couple of different ways and ended up having our radio sales reps sell everything. We think that’s the way to go is because we see our core business as connecting people to other people, products and services that we always say that enhances the quality of their life. You can phrase it differently and just say, “provide information that they find important or relevant.” – there’s lots of different ways – but it’s the connection that counts. From our perspective, it doesn’t really matter how we’re connecting them, as long as we are correcting them. We feel, whether it’s broadcasting or online or through social media or in any other way, we’re still fulfilling what our mandate is.
GOB: Let’s talk about the music, too. You’ve got a bunch of different genres from when you look west to east. You’ve got some country, you’ve got some hot AC, Rock… as a big company with lots of stations, but most of them are little markets with maybe some different music tastes, how do you program for all of that?
MM: We tend to be very mainstream. When you think about it, we want to be relevant to the largest population within the communities that we serve. In some markets we’re the only broadcaster in town. In other markets, we have some competition from other broadcasters, so it depends on what the other broadcasters are playing. But generally speaking, there are not going to be enough radio stations in any of the markets that we serve for us to be very far out of the mainstream.
We also tend to be very family-focused, so even with our rock stations, we sometimes get into a debate about how edgy do we want them to be. At the end of the day, we want it to appeal to a very broad range. We don’t want to offend anyone. Going back to what I said at the beginning about the level of reliance that a community has on its radio station, we know everybody is listening to us, so we have to really temper some of that edginess out of our brands.
GOB: Well sure, here in Toronto here if I find a radio station that offends me, I can change the station to a bunch of others. But if I’m in 100 Mile house and I’m offended by a radio station…
MM: You have no other choice.
GOB: You could hit the scan button in the car and maybe have nothing come up.
MM: Exactly. We hear from our listeners… we live right next door to our listeners, our advertisers, our employees, all of our stakeholders are right there. It’s their radio station and they have a vested interest in it, whether it’s the success of the station, what it plays, how they interact with it, how others interact with it, everybody cares very much and they let us know. If we’re off base at all, we hear it instantly.
GOB: I grew up in what is now one of your Ontario markets and there’s still not a lot of radio stations there… but I still have some friends and I know local radio is still very important to them and a lot of that is because there’s not a whole lot (of media) available that’s just about their town.
MM: Absolutely.
GOB: What are the challenges you face with a large, burgeoning, network of stations? You’re flung far and wide, you have a lot of people, a lot of different music genres, a lot of geography to cover. It’s expensive. Is it difficult to get national agencies attention, to say “hey, we’re here, we have a lot of listeners, pay attention to us, even though we don’t have a Toronto station, we don’t have a Calgary station”?
MM: Since we are so far flung, the senior operating team is not in the same location every single day. People who work in the same building as their colleagues every day take for granted the kind of exchanges that happens by accident when you happen to run into somebody in the hallway, or if you just happen to go for lunch, eavesdrop on a conversation that somebody else is having.
Those kind of spontaneous discussions and idea-sharing doesn’t happen with us, so we have to contrive that. Once a month, for a week, we all gather in Courtenay and just work together. We have our senior management meetings where we actually go through the operations in intricate detail – and we also just sit down and spend time together and bump into each other in the hallway and go out to lunch together or go to dinner. Every time we do that, we always come away feeling more passionate, more enthusiastic with better ideas and with a plan going forward… We find that very effective.
In terms of national advertisers and revenue generation, the challenge is not so much that we’re far flung, but that a lot of our markets are not rated. So often times it’s difficult to get into the sphere of influence or awareness that the national advertisers would have.
Now, Chris Nimigon was with the Vista East group before we took over and he is manager of national sales. Having him in that role has been very interesting for us, even in the west, where he is very focused on getting on the radar in front of the national advertisers, the advertising agencies, even regional buys. That’s been a strategy that has worked for us so far.
GOB: Well, The Moose as a brand is well known through cottage country in Ontario, which would help…
MM: Very much, because the same advertisers who advertise in Toronto, advertise in cottage country, because they’re going after the same audience. So, when two million people move into cottage country, they’re leaving Toronto behind and those advertisers are following them there and they advertise on The Moose, which is lovely for us.
GOB: How has the integration of Haliburton gone?
MM: Very well. From the beginning, we were aligned culturally. Both groups of stations – management and ownership – were very focused on local content. We interpreted local content a little bit differently and we did it a little bit differently, but the commitment to local community was very much in parallel and aligned, so it was easy for us to move into those operations from that perspective.
The commitment to employees was also very sound, and again aligned, but our approach to doing things was a little bit different. What we did at the very beginning was create an integration committee which was staffed by some people from the old Halliburton group and some people from Vista West. We went through every single operation in both east and west because we didn’t feel that we knew everything or that what we were doing in the west was necessarily the best and the right way to do things. We were very open minded about looking at the way that the eastern folks did things – and they were very open minded and accepting of how we did things.
That process lasted about three months, we came up with our best practices for the operation as a whole and we’re now in the process of implementing it across the company-wide.
GOB: Any really important changes and developments that stand out or that listeners would notice?
MM: We felt our strategy around news was stronger in the west than it was in the east… where they subscribed to a regional news service. We tend to be very locally focused, so about 85-90% of our news and spoken word content is specific to the market that we serve. So, we’re implementing that strategy into the eastern operations now.
Then brand integration and sharing of ideas has really taken off. We have a lot of cross-pollination and brands that are the same or formats that are the same so from east to west we are sharing resources and sharing ideas.
GOB: You’ve got The Moose as the big brand in Ontario and then you’ve got all kinds of different brands out west. Is there any thought to centralize under one type of banner per genre or per region?
MM: We’re not looking at changing that at this point. I think that the reason why having a centralized brand under the Moose brand in cottage country, why that works is because there are so many similarities within that region. In many respects, people see cottage country as one region, so it does make sense to have a unified brand in that region… We don’t have a similar territory in B.C., so right now we’re not anticipating that we would go to a unified or regional brand like that. What we did take from the Halliburton operations was that they had a lot of consistency among formats that were similar, where if they had a hot AC format, there were very many similarities between those hot AC formats, regardless of where they were played. (Vista West) tended to have much more variation, so we adopted their practice in the west. We’re aligning our brands and our formats where it makes sense to do that.
GOB: With the Haliburton acquisition, you’ve brought in Westerkirk as an investor.
MM: Yes.
GOB: The Thomson family. Well-known in Canadian media.
MM: Absolutely.
GOB: Do they have any operations involvement in this or is it just a passive investment for them?
MM: It’s a passive investment for the Thomson family. Westerkirk, which is the company that manages this branch of the Thomson family’s money, has representation on our board and while they don’t get involved in the day-to-day management, they’re very aware of what’s going on and are very aligned with us on the strategy that we’ve employed.
GOB: Can you describe the typical Vista market? Or is there such a thing? You’ve got St. Catharines, Niagara and Kelowna, and then, as I’ve said before, 100 Mile House.
MM: Right. I would say that there probably isn’t a standard Vista market.
GOB: How about a typical Vista listener?
MM: Well I would say a typical Vista listener is somebody very focused on their community… often very involved in their community. In terms of age demographic, it’s very broad – call it 25-54. I hope the national advertisers are listening, female skewed.
GOB: Some of them are readers. What’s been the more difficult challenges growing you have? People? Technology?
MM: People. I think for all businesses, not having enough skilled employees is going to be the greatest impediment to growth, and I think that’s particularly true in the broadcasting, because we are so dependent on people. We can automate, but only to a degree. This is a people business through and through. So the biggest challenge is getting good people and getting them to stay.
GOB: There’s a real tug-of-war in the industry with that technology because the people who control the money like the automation because it’s efficient. But the people who are the creative side, say “hey this automated voice track segment of the days is where we used to train the up and comers.” So there’s a real ongoing tug-of-war, it’s been going on for years really in the industry over how do you find and train good people?
MM: And I think that succession in our industry is a problem. When consolidation first started in the early ’90s, a lot of people justified what they paid for the stations they acquired or the groups of stations they acquired by cutting expenses, which usually translates into cutting people. It started then and it continued for a good decade after that.
Then what happened is a lot of people left the industry. A lot of young, creative people have options outside of broadcasting – everything that’s going on with online industries and gaming , all of that is attracting a lot of young talent – so I don’t think we’re replenishing our people fast enough.
GOB: How do you convince the twentysomething who has been making YouTube videos for years and is very creative or very funny and attracts a lot of viewers or whatever to their YouTube channel, that “hey, come work here and maybe down the road you’ll be the drive guy at a radio station”?
MM: We have to make radio interesting and entertaining again. We have to bring the creativity back into the business, and that will start to attract young people into the industry again. The one thing that radio does that those other businesses (YouTube, etc.) that we talked about don’t is have as strong a connection to the local community. There’s nothing, I think, that is as satisfying being in a fulfilling job in a market that you really love, and are recognized in that community for the services you’re providing.
GOB: The morning man in Courtenay, probably a big star in town.
MM: Absolutely.
GOB: Let’s turn to some of the new technology that’s going to affect radio and what we talked about during our panel at Canadian Music Week – like the changes coming in cars. Is it as big of an issue for you, given that your stations don’t really serve heavy commuting markets? Or do you still worry about maintaining radio’s dominant spot when it comes to in-car entertainment?
MM: We always worry about or focus on maintaining radio’s dominant position in the car. When you turn away and take that role or position for granted, that’s when you get blindsided. But having said that, I don’t think radio has to worry – and I know that a lot of people are ringing the death knell of radio in cars. Number one, radio is still free. Number two, if you are locally focused, there’s nobody else who can provide that immediate connection to the community the way radio can. Even though a lot of people keep talking about how radio’s going to disappear from the dashboard in the car, if you talk to consumers I think 90% of them say they want radio in the cars. FM is still very important medium for them.
GOB: And in some cases AM. I wouldn’t buy a car that I couldn’t get 680 news/traffic in Toronto.
MM: Absolutely.
GOB: What about some of the other new technologies, delivery via mobile or WiFi? Is there a Vista radio app in the works like some of the other broadcasters have?
MM: There is. It’s in beta testing right now, so we hope to launch it in the next month or so. We definitely believe that we want our listeners and our advertisers to enjoy the benefits of Vista Radio on as many different platforms as possible, and that definitely includes mobile.
GOB: Do you fear the links of Rdio or Songza or Galaxie, music apps that you can take anywhere on your phone?
MM: No. We’re certainly aware and monitor what they’re doing, but again, the difference is that they can’t connect with the communities they way we can. We are right there. Not only are we aware of what our listeners want, what’s going on in the community, we are delivering that information to them. We know what’s going on with our advertisers and connect with them on regular basis. They’re right there beside us. As long as we stay local, I don’t think we will have a problem.
GOB: Are you finding though that listeners are changing and need more, or different, things to be kept happy than just being local?
MM: What’s interesting is we used to be able to put people in categories and say that these certain people listen to country and those people listen to CHR and older people listen to jazz and so on. That is changing. People’s taste in music is becoming more and more eclectic. Maybe we were able to put people in these silos before because they didn’t have a choice, so it was convenient for us and they abided by it because that’s what we offered them.
It’s going to be interesting to see what happens to radio formats as we go forward, because if you look at people’s iPods they’re not just listening to one genre, but a number of different genres. I don’t know exactly how you program that. I’m not a programmer, but it’s something to look for in the future in terms of the evolution of music formats. If you call that more demanding, it might be, because they’re making us be a little bit more creative and listen to them a little bit more closely.
In Canada, what I also find really interesting is that it used to be that people were forced, and I’d put that in italics, to play Canadian music. But our music industry has evolved now and the quality of music we are producing in Canada is so good that I don’t think that there’s a broadcaster in Canada that doesn’t want to play Canadian music. That comes from listening to our listeners. That’s what they want and that’s why we want to play it.
As for the spoken word content, I think that listeners do want to be entertained, and because they’ve got so many different places they can go to for that, we better be darned entertaining or we’re not going to be able to keep those listeners. So again, that means being more creative and bringing the creativity back into radio broadcasting.
GOB: Carrying that forward about the way listeners are changing and the way the stations are changing, the music tastes are changing, what do you have to do differently to keep the advertisers happy?
MM: In our markets, about 85% of our business is local, so we have a very tight relationship with our advertisers. I think we can keep them happy just by listening to what they want, and providing creative content for them so that they can get their message out in a way that’s beneficial for them. I also think that we have to be accessible and provide opportunities and options outside of radio broadcasting, which includes digital, mobile, etcetera.
GOB: Even with that though, some of the old standbys work really well don’t they? When you’re on location, pushing cars or whatever it is, that still draws a lot of people and still shouldn’t be discounted, just because we’re in a new media age.
MM: Absolutely, because if you can say that you’re at a particular place and you invite people down and they can get prizes and you have a party atmosphere, that’s something that nobody else can do.
GOB: To carry that further, that’s where the music industry’s has gone: More live events. Bring people in, give them an experience that they can’t get elsewhere, give them prizes – that’s a lot of where the media industry is going now, too. I was just at Rogers and they’re talking about creating new, live event sports programming to bring people, not only to the channel, but into the stadiums as an event. It’s interesting how we tend to get caught up in thinking of all the new media stuff and what it can bring to my phone, to my car, and some of the old stuff, bringing me to something, still works pretty well.
MM: Especially because we’re such social creatures. We want to be together. So any opportunity to create an atmosphere what we bring people together is going to benefit – whether it’s the advertiser, the station or the community.
GOB: Obviously you’re interested still in expanding?
MM: Absolutely.
GOB: But where? Would you look farther east? What about bigger markets?
MM: Our strategy is very focused on mid-sized and small markets. We don’t want to be in the large urban centers. So that would include Vancouver, Calgary, Edmonton, Ottawa, Toronto. We see the strategy for operating successfully in those major markets as being very different from operating in the smaller markets. We think that the large broadcasters should do the large urban markets and leave the smaller markets to us.
GOB: There’s something of a similar business out east, Newcap, which has been traditionally in the smaller markets, but they now way they want into the bigger markets. It’s interesting to me anyway, to compare and contrast.
MM: It’s tough to do both really well, and I think sometimes broadcasters who try to do both really well fail at one or the other. We know we’re good at mid and small markets and that’s where we’re going to focus.
GOB: Anything keep you up at night?
MM: My number one concern is always about recruitment and retention. I want to make sure we have the best employees that we can have, so we’re always looking at ways to retain good people, and we are often in the market looking for really good, qualified, creative, passionate people to come work for Vista.
GOB: Does that involve expanding where you find them so you’re not just going to the latest recruits out of broadcasting school, that you can find them in lots of different places?
MM: I’m notorious for offering jobs to people on the airplane, in restaurants, the shoe store. If I run into somebody who is really passionate about what they’re doing, that passion usually translates into radio. It’s more about the personality than it is about the industry that they’re involved in.
GOB: Good sales people can really sell anything, whether it’s air or shoes.
MM: And entertainers can entertain anywhere. My attitude is hire for the personality and teach the skills.
