• by Erik Sass  @eriksass1, November 21, 2007

The war of words continues. Arbitron replied Monday to the four major broadcasters that sent a sharply worded letter of criticism to the radio ratings company last week. While striking a conciliatory tone in some regards, Arbitron President and CEO Steve Morris reminded the broadcasters about one of the fundamental facts of life: everything costs money.

At issue are the ratings data produced by Arbitron's Portable People Meter, a passive electronic measurement device that is set to become the industry's currency for radio ratings over the next couple of years. PPM ratings are already in use as currency for radio ad sales in Houston and Philadelphia--markets that broadcasters are complaining about.

In the original letter sent to Arbitron, the CEOs of Clear Channel, Cox Radio, Cumulus Media and Radio One demanded that Arbitron meet its "in-tab" sample targets for all age segments in the 18-54 range and all ethnicities, including African-Americans and Hispanics, who they say are under-represented. The broadcasters also took issue with Arbitron's proposal to lower the number of participants required for a sample size to be considered statistically valid.

In his response, Morris invited the broadcasters to meet personally with him to present specific demands for adjustments they want made to the PPM system. However, he added that the broadcasters may have to readjust expectations about the cost of the service, implying that meeting the current target sample sizes could make it more expensive.

The perceived high cost of the PPM system has long been a bone of contention between broadcasters and Arbitron. While the terms of deals between broadcasters and Arbitron haven't been disclosed, at one time Arbitron proposed a price hike of at least 65% over its paper diary service for PPM results.

A drawn-out battle between Arbitron and Clear Channel Radio hinged on the price of PPM results, as well as Clear Channel's doubts about its accuracy.