Monday, August 08, 2005

Nielsen learns to lobby

Nielsen Media Research, a company used to staying out of the spotlight, has learned the hard way the sad necessity of lobbying hard in Washington in order to defends its turf. Notes a piece in today's NYT business section:
    Since the early spring of 2004, the company has spent more than $4 million to hire some of the nation's premier lobbyists to counter a savvy campaign conducted by Rupert Murdoch's News Corporation, a team of longtime Clinton strategists hired by the media conglomerate, and a coalition of black and Hispanic community leaders. Before 2004, Nielsen had not spent a dime on lobbying. Nielsen has also sprinkled more than $200,000 among minority organizations like the National Urban League, the National Council of La Raza, the Rainbow/PUSH Coalition and the Dragon Boat Festival in San Francisco, according to Nielsen officials.

What caused all this ruckus in the world of TV ratings? It's all about the local people meters:
    Nielsen's wake-up call came in the early spring of 2004. The company, a division of the Dutch company VNU, was in the early stages of introducing a new way to measure local television audiences, and the system had just arrived in New York. The technology, called local people meters, replaced set-top boxes and paper diaries, and offered advertisers and TV networks something they had never had before: detailed local demographic data every day of the year about who was watching which shows and in what numbers.

    But the test results in New York alarmed executives at News Corporation. The Fox and UPN affiliates that the company owns suddenly found themselves staring at seemingly inexplicable drop-offs in viewing, particularly double-digit percentage declines among minority audiences. Those two station groups carry shows that attract significant minority audiences.

    With television advertising revenue in local markets nearing $22.5 billion a year, any ratings decline would wreak havoc on the station groups' bottom lines as local people meters reached the country's largest markets.

All of this underlines an ongoing basic problem with ratings; the fact that increasingly, no-one in the industry has any faith in them. Or, even worse, that more accurate ratings measurements will show that audience figures are much lower than what everyone thought they were. Or, even worse, that no-one really knows if all that advertising money is wisely spent. That's perhaps why, back in early June, "Seventeen major media companies want Nielsen to postpone expansion of its Local People Meter ratings system until an independent group appraises the system in markets where it's already being used. In particular, the companies indicated that they want to know whether the system underreports the viewing preferences of the black and Hispanic audience, as some minority groups have claimed."

I last looked at this back in April (see What future for mass media? and Media chaos ahead?). As I noted back then, there's a general feeling abroad that the mass media are approaching a tipping point, where the whole advertising-funded model that has supported the U.S. media in the modern era might be getting closer to complete collapse.


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