• by Erik Sass  @eriksass1, April 14, 2010

This week seemed to bring the resolution of the dispute between radio ratings firm Arbitron and its client, the Spanish Broadcasting System, concluding a controversy marked by a number of rapid reversals.

Most immediately, SBS has agreed to start encoding its audio signals for measurement by Arbitron again, allowing the latter to provide customers for its radio ratings a more accurate picture of the radio marketplace.

The drama began back in June 2007, when SBS first signed a contract with Arbitron for radio audience measurement by PPM -- a passive electronic measurement device -- including a requirement that SBS encode its audio signals so they can be measured by PPM.

However, PPM became embroiled in controversy focused on Arbitron's failure to meet target sample sizes for minority listeners, which minority broadcasters claim resulted in apparent declines in audience size, damaging their ad business.

Amid this ongoing dispute, SBS says it requested a credit -- or refund -- from Arbitron last year in accordance with their contract.

Arbitron previously offered refunds if it failed to deliver certain minimum target sample sizes for various audiences. After Arbitron refused to grant SBS a credit in 2009, SBS stopped paying for PPM ratings, which Arbitron stopped delivering shortly before the New Year.

On Feb. 4, SBS escalated the tit-for-tat dispute with its decision to stop encoding its audio signals in New York, Miami, Chicago, L.A. and San Francisco. On Feb. 11, Arbitron responded by obtaining a restraining order from the New York State Supreme Court requiring SBS to begin encoding for PPM again, as per the terms of their contract. However, in late March, New York Supreme Court Judge Shirley Kornreich lifted the temporary restraining order, allowing SBS to stop encoding its signal.

The absence of data on SBS broadcasts negatively impacted Arbitron's PPM ratings, making it more difficult for rival broadcasters and media buyers to assess the relative market share of different radio stations. By boycotting PPM, SBS put pressure on Arbitron, which has probably played some role in the current resolution of the dispute.

Although the terms of the resolution are not known -- the companies are still negotiating -- they likely involve some kind of financial settlement. On one side, SBS has demanded a credit from Arbitron for failing to meet performance guarantees, while on the other, Arbitron has claimed that SBS owes it $2.5 million in unpaid fees from the period of the boycott.

Arbitron still faces criticism from minority broadcasters over its alleged failure to meet sample size goals for minority audiences. The much-publicized dispute has brought scrutiny from the Federal Communications Commission and a congressional committee, which may re-open hearings on the matter.