Earlier this month, Fox became the first network-owned station group to agree to license Rentrak's digital set-top audience ratings for all of its stations. The deal covers 28 Fox-owned stations in 18 local TV markets from New York City to Ocala-Gainesville, Fla.
If Nielsen fails to come to terms with Fox by the end of today, it would be the first time since Arbitron operated a competing local TV ratings service that a network-owned stations group agreed to do business exclusively with a ratings provider other than Nielsen. Arbitron left the local TV ratings business in the fall of 1993, and was acquired by Nielsen last year and now operates under its Nielsen Audio banner.
While Fox would be the highest-profile station group to walk away from Nielsen, others have already done so in selected markets. Two years ago, the Sinclair Broadcast Group went exclusively with Rentrak for ratings in four of its local TV markets.
While other major station groups have also signed deals to license Rentrak data -- including a recent multi-market agreement by the CBS station group -- most of those deals have been more of a hedge to utilize Rentrak's data to augment conventional ratings contracts they have with Nielsen.
Unlike Nielsen, which utilizes either paper diaries or combinations of paper diaries and electronic meters in all but the biggest TV markets, Rentrak utilizes a method that extrapolates TV audience estimates directly from digital TV set-top devices consumers use to watch television. While Rentrak's methods are not without question -- the Media Rating Council recently required Rentrak to stop using the term “census-based” to describe its ratings -- local TV stations are less than happy with the quality of some of Nielsen's local TV measurement methods, which are considered creaky at best.
Nielsen also created some tension with local TV stations when it announced plans to begin introducing “broadband-only” homes -- households that receive no subscription TV services of any kind -- into its local TV ratings samples, though it backed down from that plan after the National Association of Broadcasters complained about the move, although Nielsen is adding broadband-only households to its national TV ratings samples.
While much of Fox’s conflict with Nielsen relates to its ratings methods, executives familiar with the negotiations say there is also a considerable bottom-line aspect to it. They characterized the price increase Nielsen is seeking to renew its local TV ratings contracts as being exorbitant. They said the Fox stations also feel they can switch to Rentrak’s ratings with relative impunity, because Rentrak is believed to have highly regarded audience data for two of the most important advertising categories sold by the local Fox stations: automotive and entertainment.
When CBS announced its non-exclusive deal with Rentrak, it explicitly cited the opportunity to utilize its data on automotive consumers as part of its rationale.
Nielsen and Fox have gone toe-to-toe in the past. A contractual and methodological tiff between the two companies a decade ago led to the first Congressional hearings since the TV ratings scandals of the 1960s, which was the basis for forming the MRC as an industry self-regulatory body. While terms of Fox's eventual contract renewal with Nielsen were never disclosed, Nielsen made a number of significant methodological changes following that campaign, including weighting its ratings samples to give greater credit to African-American and Latino viewers.
“Nielsen is committed to providing comprehensive and representative television measurement for our clients and the industry,” Nielsen said in a statement provided to
MediaDailyNews this morning. “We have a long history of working with our clients to offer best in class measurement and currency based products upon which the media and advertising
industries can transact with confidence. Though we do not comment on contract negotiations publicly, Nielsen continues to work closely with Fox and all clients to meet and exceed business
Wayne Friedman contributed to this story.