• by Joe Mandese  @mp_joemandese, June 3, 2004

TV ratings watchdog the Media Rating Council this afternoon will meet to review the impact a TV ad campaign attacking Nielsen Media Research might be having on TV ratings in four of the nation's largest markets - New York, Los Angeles, Chicago, and Washington, DC - and whether it should sanction or even expel the MRC member that has been funding the ads, News Corp.

The meeting comes just one week after the MRC's Television Committee voted to withhold accreditation of Nielsen's New York people meter, citing Nielsen's failure to meet the MRC's minimum standards for media research. That MRC decision, ironically, became the centerpiece of the new TV and print ads being run by News Corp.-backed advocacy group Don't Count Us Out, which claims an MRC audit of Nielsen's local people meter system in New York is empirical proof that the new ratings system undercounts minority viewers.

The outcome of today's meeting could test the viability of the of the MRC as a self-regulating force within the media research community, as well as the very fabric of the TV advertising marketplace, which has essentially operated on the basis of an ad hoc honor system for more than 50 years, and where the empiric nature of Nielsen ratings have served as the only constant, despite changes in its research methods and the debates that have inevitably been sparked by them.

As such, the jostling between Nielsen and News Corp., and the way the MRC ultimately decides to deal with it, could open a much bigger can of worms that might include an erosion of confidence in the underlying currency of Nielsen ratings and the industry's ability to police and manage itself.

The situation has grown so severe that some MRC board members believe it could be approaching what one described as a "meltdown" that could throw the entire TV advertising marketplace into disarray, and which could lead to a spate of litigation among various players, including Nielsen, News Corp., and other interested parties.

On Wednesday, DCUO announced plans for multiple legal actions including California state and federal lawsuits to prevent the rollout of local people meters in Los Angeles and to stop them in New York. Alex Nogales, head of the National Hispanic Media Coalition, and the de facto voice of DCUO, said the group also is continuing to lobby federal lawmakers to take action, though he said a request to investigate the matter has been dropped by General Accounting Office, the investigative arm of Congress, and has been referred to the House Judiciary Committee. He said DCUO also plans to pursue a federal antitrust suit against Nielsen and its "Dutch" parent VNU.

DCUO is not the only one contemplating litigation to resolve the matter. Nielsen, as well as various Nielsen clients may have grounds for suits, as well. Asked whether News Corp.'s funding of a TV ad campaign addressing Nielsen ratings violates the broadcaster's contract with Nielsen, a Nielsen spokesman said "I cannot comment on that," but executives familiar with Nielsen's standard boilerplate say it is a basic clause in most Nielsen contracts. Other interested parties are believed to be considering legal action against News Corp., alleging that its support of the anti-Nielsen TV ads are tantamount to TV ratings sample tampering, though none have stepped forward.

A senior News Corp. executive, who asked to be identified as a spokesperson, finally acknowledged News Corp.'s financial role in backing DCUO and its advertising and lobbying efforts. He said News Corp. was "confident" that the support did not violate its contract with Nielsen.

"We are proud that we could provide the support that gives voice to these issues and concerns," he said, referring to the financial support News Corp. has given to DCUO, which is made up primarily of non-profit civil rights groups. He acknowledged that News Corp. is the primary source of funding for the group, though he declined to specify how much money the company has contributed to date.

He claimed that News Corp. was merely matching the heavy promotional and lobbying efforts being undertaken by Nielsen in the period that followed a breakdown in discussions between News Corp. and Nielsen executives in March over the implementation of the local people meter system.

Nielsen, meanwhile, has also been losing crucial support from some important constituents. Viacom's CBS unit, which has been a staunch supporter of Nielsen's local people meter plans, Wednesday called on Nielsen to delay their rollout until Nielsen can address the "current shortcomings" raised by the MRC's audit of the New York people meter service, which goes live today.

Spanish-language broadcaster Univision, which has a lot riding on the rollout of local people meters, as well as their roll up into an expanded national people meter sample, recently became a very vocal critic of the system's sample composition, though for very different reasons than the DCUO's Nogales has been claiming. Univision research chief Ceril Shagrin says while the New York people meter sample accurately represents the overall composition of Hispanics in the New York market, it actually overstates English-speaking Hispanics and understates Spanish-speaking Hispanics.

The entire situation grew decidedly more messy on Tuesday when Nielsen announced a convoluted plan to move forward with two redundant ratings systems in New York - the new people meters and the old meter/diary system - for a three month period beginning today. While TV markets have operated with two competing ratings services in the past, they were managed by two competing companies - Nielsen and Arbitron - not by a sole provider whom the market looks to as the arbiter of the market currency.

Other powerful players sitting it out on the sidelines include cable TV giant Comcast, which has occasionally been quite vocal in its support of local people meters, as well as a number of members of the MRC Television Committee that will meet today.

One important source who apparently remains a Nielsen supporter is NBC research chief Alan Wurtzel.

"Nielsen is trying to make the best of a bad situation. In effect, they have delayed the implementation because they continue to run parallel services," he said, adding, "What's changed is that they lifted the restriction on use of the [local people meter] data so it's up to the marketplace to figure out which to use."

While that may be perplexing and complicated for some in the New York TV ad marketplace, Wurtzel notes, "Don't forget, many years ago there were two sets of local [ratings services] -- Nielsen and Arbitron -- and the world survived."