Monday, May 19, 2008

Nielsen: The Monopoly

Here is a most interesting article that I had not seen before yesterday. It's testimony from Pat Mullen of Tribune Broadcasting to Congress in 2005. The bill, the Fair Ratings Act, shows the need to change the way Nielsen operates. The bill is described as "A bill to provide for the accuracy of television ratings services, and for other purposes."

"My name is Pat Mullen. Our company, Tribune Broadcasting, operates 26 major market television stations located in 15 states from coast to coast, including stations in 8 of the 10 largest markets.

Mr. Chairman, I regret to say that the measurement system we have today in the largest television markets is not worthy of public trust. It does not have the trust of our company or that of more than a dozen other responsible broadcasters.

The problem, Mr. Chairman, is that the keys to our success -- our ratings -- are held by a monopoly. When Nielsen had a competitor, its service and its response to client concerns were substantially better than they are today. In the absence of competition, we are left to plead for fair treatment and reliable results. Time and time again, Nielsen has turned us away.

We have no choice but to do business with Nielsen. Ratings are the currency on which the advertising business operates. And despite recent challenges, our company has always had a good relationship with Nielsen. So we are here today reluctantly, but with a sense of urgency.

Sampling issues abound, including problems with response rates, in-tab representation and fault rates. For example:

* New York's LPM response rate averaged 25.3 percent for the week ending July 3, 2005. This means that three out of every four households initially designated as sample households refused installation of a people meter in their home or accepted a meter but did not contribute any viewing data.
* Young men ages 18-34 have been persistently under-represented in Boston, Chicago, Los Angeles, New York, Philadelphia and San Francisco. Fault rates for men 18-34 generally are twice as high as those for men ages 55+ in LPM samples.
* Fault rates remain unacceptably high for important audience segments such as African Americans and Hispanics despite new coaching initiatives. On the average day in New York for the week ending July 10, the viewing choices of nearly one-third of the black and Hispanic men ages 18-34 in the LPM sample were not reflected in the ratings.
* Chicago sample data for the week ending July 10th show that almost one-third of the 443 African Americans installed in the sample were not in tab — meaning their television viewing was not counted in the ratings.
* Households of five persons or more have been persistently under-represented in the total samples in New York, Los Angeles, Chicago and Boston. In New York, for the week ending July 10, the viewing choices of more than one in four of the black and Hispanic households of 5 or more persons in the LPM sample were not reflected in the ratings.
* Fault rates for households of five or more are generally two to three times as high as in one-person households."

What happened to this bill? Read here.

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