Survey Finds Ratings Suppliers Are Monopolies, But Respondents Eschew Regulation

Two-thirds of respondents to a MediaPost survey believe Nielsen Media Research is an unregulated monopoly, but most of them don't believe a law should be created regulating the TV ratings business. Those are some of the key findings of a survey fielded online by InsightExpress for MediaPost leading up to today's Congressional hearings on a bill designed to regulate the TV ratings business.

The findings, based on the responses of 248 subscribers, more than 66 percent of who identified themselves as either advertiser or agency executives, are consistent with the positions taken by top ad industry associations, which oppose Senate bill 1371, or the so-called FAIR Ratings Act.

But unlike the statements issued by the American Advertising Federation, the American Association of Advertising Agencies, and the Association of National Advertisers on Tuesday, respondents to the MediaPost survey were mixed on the industry's ability to effectively self-regulate TV ratings via the Media Rating Council, the industry ratings watchdog, which was formed in the 1960s in response to Congressional hearings about the veracity of TV ratings then. Asked if the Media Rating Council is capable of self-regulating how TV ratings are managed, 50 percent said yes, 27 percent said no, and 23 percent said they were unsure.

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On Tuesday, Nielsen issued an update of a sweeping series of client, noting that it is continuing to work toward an agreement with the MRC on a "voluntary code of conduct," but gave no indication if or when it would be completed. That Nielsen and the MRC would need to negotiate such a code is telling for many observers in the debate, given that media ratings firms are supposed to comply with the MRC's accreditation process, something that has not always been the case with Nielsen, which has repeatedly gone its own way, even going so far as to make fundamental changes in its TV ratings methods, or to role out new measurement systems without first getting the MRC's stamp of approval.

"Assuming that the review of the code is completed and that the text of the code is agreed to by the vendors and measurement services, Nielsen intends to adopt the code," wrote Nielsen President-CEO Susan Whiting in the letter sent to clients on Tuesday.

Whiting, and MRC Executive Director-CEO George Ivie are among those expected to testify to Congress today. Kathy Crawford, president of local broadcast at MindShare, and an influential member of the AAAA's TV committee also is expected to speak on her agency's behalf. Other speakers include: Ceril Shagrin, executive vice president for research, Univision, and a former top Nielsen executive; Pat Mullen, CEO, Tribune Broadcasting; and Gale Metzger, a consultant to Knowledge Networks, former CEO of Statistical Research Inc. and former CEO of SMART Media.

Plenty of industry ears will be turned to the testimony, how Congress acts, and what the impact of the debate have on the MRC's ability to regulate ratings, not just for TV, but for all forms of media.

Interestingly, respondents to the MediaPost survey also deem other major media ratings providers to be unregulated monopolies, especially Arbitron, which is the sole provider of radio ratings in the U.S. Fifty-seven percent agreed that Arbitron was an unregulated monopoly in radio ratings. Mediamark Research Inc., the primary source of media buying data for consumer magazines, was considered an unregulated monopoly by only 33 percent of respondents.

Despite those views, the majority of respondents who said they actually subscribe to those ratings services indicated they were satisfied with their ratings data. Only 24 percent of Nielsen subscribers said they were dissatisfied, vs. 15 percent of Arbitron's, and only 8 percent of MRI's. The survey also found high dissatisfaction levels for Nielsen affiliate, Nielsen//NetRatings. Eighteen percent of NetRatings subscribers said they were dissatisfied with the online ratings firm vs. only 11 percent for its main competitor comScore.

Respondents said the biggest issue concerning unregulated monopolies is their ability to create an "anticompetitive" environment that prevents new players from entering the market with innovative approaches to media ratings and research. More than half (53 percent) of respondents, cited that as their major concern. Interestingly, the stifling of media research innovation was a major factor cited by the advertising trade associations as a reason not to enact legislation regulating the business, suggesting there is an inherent conflict in thinking on that subject.

"Predatory pricing" was the second biggest factor, cited by 52 percent of respondents, followed by "methodological" issues (46 percent) and "data access" issues (39 percent).

While most respondents are loath to support legislation, the anticompetitive nature of ratings monopolies looms large in their minds. Asked if they deemed TV ratings upstart erinMedia's antitrust suit against Nielsen to be valid, only 27 percent disagreed.

An overwhelming 80 percent of respondents said the kind of access to digital TV set-top data erinMedia has been trying to develop as an alternative to Nielsen's sample-based methods are important to the future of both TV audience and advertising effectiveness measurement.

But perhaps most telling of all, 44 percent of advertisers, media buyers, planners and other survey participants said they believe the validity of TV audience ratings is eroding to the point where it will begin to affect how advertisers buy television.

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