• by Joe Mandese  @mp_joemandese, July 13, 2004

In a surprising development that may hint at Nielsen's long-range plans for the portable people meter, the TV ratings giant Monday announced plans to merge its Canadian operations with arch TV ratings rival BBM Canada. The deal was surprising for several reasons. For one thing, the BBM is an industry-owned not-for-profit ratings group that essentially operates as a joint industry committee, or JIC, a business model that Nielsen has fought to prevent in the U.S., but one which believe is destined for a revived effort in the U.S. marketplace. In JICs, all members of the TV industry - advertisers, agencies and telecasters - have an equal say in the development and management of TV ratings, which are owned by the industry, not the private contractors that produce them.

But the most striking aspect of Nielsen's deal with the BBM is that the BBM has essentially voted in favor of the portable people meter, a technology it licensed from Arbitron that uses lightweight passive, portable meters to measure TV and radio - and potentially other media - exposure in both home and out-of-home locations. The BBM has completed an extensive test of the portable meters and is planning to roll them out as the basis of commercial ratings in Montreal and Quebec prior to completion of its joint venture with Nielsen in Canada.

While the companies did not provide terms of that venture, they said it would initially use Nielsen's conventional people meters in Toronto, Vancouver, Calgary, Ontario (regional and national), but executives familiar with the Canadian TV marketplace believe that is an interim step toward the nationwide roll out of the portable meters, and that the deal is Nielsen's tacit endorsement of portable people meters, in the Canadian market at least.

"It's going to be the official currency of TV advertising in Quebec this fall," said one U.S. observer, adding, "What does that say about Nielsen's commitment to portable people meters in the States?"

That's a question many top research executives in the TV and advertising businesses have been asking ever since Nielsen struck an ingenious deal that gives it a right of first refusal to develop the portable people meters as a TV ratings service in the U.S. But Nielsen has been slow to push forward on the technology, citing the need to prudentially vet and evaluate the technology before getting behind it commercially. Some executives have seen that as a tactic to stall the process and keep Arbitron at bay.

On Monday, Nielsen and Arbitron announced they have "devised and tested" new approaches that have improved the performance of sample households testing the portable people meters that are "in line with what Nielsen would expect when recruiting and maintaining a set-top meter panel."

While encouraging, the statement gave no indication that Nielsen's support to deploy the system was imminent.