An Introduction

In this issue we introduce Research Report, a page in which we explore the people, companies and methodologies involved in collecting and interpreting the growing body of TV data, and the ways that data can provide information and insight into who is watching and how television is used.

Though ratings are widely discussed, the field of research remains a mystery to many, even within the TV industry. Even for those in the know, it grows more complex, and mushrooming technology is changing the ways TV is viewed. We hope this feature will help shed light on this important field, without which commercial television as we know it could not exist. –ALEX BEN BLOCK

Nearly 300 clients of Nielsen Media Research are expected to convene Tuesday in Miami for a biennial rite: meeting with the only purveyor of the TV ratings and demographic data crucial to their ability to do business.

The attendees range from media buyers to research executives. They include many local broadcasters and representatives of the largest broadcast-cable-syndication conglomerates. The three days of meetings at the Doral Hotel will have what a Nielsen spokeswoman described as “a very packed agenda.”

Mike Mellon, senior VP of research for the ABC Television Network, values the opportunity for “the nerds in the business” to get away from the day-to-day frenzy and take the longer view. “I think it will be a little more contentious than normal. This is a big meeting for Nielsen. They have to come out and play their A-game.”

Paul Donato, senior VP and chief research officer for Nielsen, said, “We have a lot of really good stuff to show. I think people will come away from the meeting comfortable that we’ve got the right things in our vision, on the horizon, that the steps we’re taking are the right steps.”

Much of the discussion will be about issues addressed in a Feb. 18 letter from Susan Whiting, president and CEO of Nielsen, to clients. The letter came about because last year many Nielsen clients went public with long-simmering complaints, including controversy over the counting of young viewers and minorities and the long-standing grievance that Nielsen doesn’t measure out-of-home viewing. The complaints also include topics such as software programs not performing up to customers’ demands and measurement systems that don’t keep up with viewers’ ability to time-shift programs.

Particularly awaited is information on a subject Ms. Whiting did not address in her letter: progress in the study of extended-home viewing measurement in second or vacation homes and student residences.

“It’s a good initiative, said David Poltrack, executive VP of research and planning at Viacom-owned CBS Television Network, one of the client-sponsors of the study. “I would be disappointed if it didn’t kick in by fall 2006.”

“This has the possibility of increasing 18 to 24 and 18 to 34 ratings by 5 percent to 15 percent,” said Jack Wakshlag, chief research officer at Time Warner’s Turner Broadcasting, another of the client-sponsors.

Mr. Poltrack will speak at the Nielsen client meeting about issues of growing concern to advertisers, including increased time-shifting via digital video recorders and the availability of video-on-demand.

In her letter, Ms. Whiting told clients that Nielsen is “accelerating plans for measurement of video-on-demand viewing. We will get back to you with a plan for VOD measurement in 90 days.”

Ms. Whiting said Nielsen is acceding to clients’ demand for measurement of three types of viewing-live, same-day and live-plus-seven-day viewing-before DVR homes are included in the National People Meter sample, which Nielsen has delayed until January 2006.

At the meeting, Ms. Whiting will announce what is billed as “the future of television audience measurement,” the rollout of the Active/Passive Meter System, which Nielsen calls the A/P Meter for short. She will call it “one of the most exciting technological breakthroughs in Nielsen’s history of measuring television audiences,” according to an advance copy of a portion of her speech provided by Nielsen.

The A/P Meter will be in addition to Local People Meters. The A/P Meter attaches to each TV set in the home, allowing Nielsen to accurately monitor exactly what is being watched and for how long. It is designed to ensure Nielsen measures not only current shows but also VOD, DVR and other uses for the TV set.

The first A/P Meter was installed March 3 in a home in the Fort Myers, Fla., market (in Naples, Fla.). Ms. Whiting said it is the home of two seniors who have two TVs, a VCR, a VCR/DVD combo player and a cable set-top box with a DVR. It will begin contributing to the local ratings sample April 7. She said the A/P Meter will be introduced to Nielsen’s National and Local People Meter samples by July.

Clients’ intensifying frustrations led to a daylong conference in late January sponsored by the American Research Foundation, the key research-industry professional organization, most of whose members are also Nielsen clients. The ARF meeting explored whether it is possible to solicit competition with Nielsen without running afoul of antitrust laws. They agreed to come up with a plan of action to create an entity that can commission primary research that could serve as a baseline against which to compare data and analysis in the future.

ARF President and CEO Bob Barocci was not available for comment, but sources familiar with the discussions at a March 7 ARF committee meeting said the key issues are a demand for a service that produces quality data, the wish by clients to have complete access to that data and for clients to be able to steer research initiatives.

One thing that was apparent, though no vote was taken, was a clear division between those who advocate fixing the current measurement system and those who want to design a new system.

“I want you to know that we’ve heard our clients,” said Ms. Whiting in her letter, which addressed those concerns and others.

Mr. Wakshlag will be in Miami this week and is looking for “an openness” in Nielsen’s processes and communications. “If they don’t [operate that way], they are inviting serious competition and serious oversight by the government,” he said.

He was alluding to one of the key issues confronting Nielsen as a result of the widely reported pitched battle last year over the rollout of the Local People Meter service in New York, Los Angeles, Chicago and San Francisco.

The fiercest organized opposition to the LPMs, the Don’t Count Us Out Coalition, funded and advised by News Corp., galvanized around the charge that Nielsen’s new meter-only service undercounted viewing by some minorities compared with the results in the diary-meter service replaced by LPMs. The coalition rallied a wide range of politicians and community activists but was unable to stop Nielsen from installing the LPM service in the four cities. The coalition’s goal now is to force government oversight of the TV ratings system.

The coalition’s recently named executive director, Cynthia Jasso-Rotunno, a minority affairs specialist and lobbyist, and campaign manager Josh Lahey, who also has a political background, spent time recently on Capitol Hill. “We’re trying to advocate for a system in which there is some check on [Nielsen],” Mr. Lahey said. “I think Nielsen has begun to address our issues, but the fundamental issue of oversight still exists. Until that is done, I don’t think anyone in the coalition will be satisfied. To us, it’s a matter of accountability. When the [Media Rating Council] fails to give accreditation, Nielsen can’t just roll that [service] out.”

“Their agenda is not my agenda,” said MRC Executive Director George Ivie, who is seeking support from the Federal Trade Commission and Congress of the congressionally mandated accreditation role the MRC plays and to stand ready to communicate its support if needed. He believes that questions raised on Capitol Hill “show a fun
damental lack of confidence in our relationship with Nielsen. “We’d like to establish a code of conduct with Nielsen,” said Mr. Ivie, who will not attend the meeting since the MRC is not a client.

Melva Benoit, senior VP of research and marketing for Fox Broadcasting, is dispatching several members of her staff to the client meeting. She said the research and development mechanism involves “basically bringing clients in to talk about how the methodology is constructed.”

Jon Lafayette, Jay Sherman and Alex Ben Block contributed to this report.