• by Joe Mandese  @mp_joemandese, August 12, 2005

Nielsen Media Research has quietly filed a motion with the court asking that a federal antitrust suit brought against Nielsen by upstart erinMedia be dismissed. The arguments for dismissal made by Nielsen's attorneys in the motion, filed Aug. 3, ironically assert that erinMedia "lacks standing" as a plaintiff under federal antitrust laws "because it could not compete in the relevant market."

But the real story may be what Nielsen's defense defines as the relevant market in this courtroom battle. And it ultimately may have less to do with defining relevant markets than it does with defining relevant TV ratings methods.

Nielsen claims that because erinMedia's TV ratings plans are derived from TV digital set-top data, something many stakeholders, especially those on Madison Avenue are eager to get their hands on, it can only represent a portion of the U.S. TV audience. Nielsen asserts that only 60 percent of the American TV audience now receives television via cable, and that many of those receive it via analog cable, implying that erinMedia does not plan to collect viewing data from households representing 40 percent of U.S. TV homes. That's ironic, because in its filing, Nielsen acknowledges collecting its data from a far smaller piece of the TV universe.

"Nielsen collects its national television audience measurement from a sample of approximately 5,000 national households." Nielsen currently estimates the U.S. TV universe is comprised of 109.6 million households. Nielsen, of course, claims its methods are more representative, because it uses statistical methods to create its sample.

On Monday, erinMedia is scheduled to hold a meeting with the Media Rating Council to outline its methods for measuring viewing for all TV households, not just those receiving digital cable, and to formally apply for MRC accreditation, a key step toward becoming a valid TV ratings service, and one that Nielsen ironically bypassed before rolling out many of its local people meter markets in the past year.

The erinMedia plan will not depend solely on collecting and tabulating TV usage data from digital set-tops, but will include a variety of statistical analyses that model, extrapolate, and project that viewing to the total TV universe. Importantly, each of those methods will be "platform-specific," meaning that erinMedia might use different methods to account for viewing within a digital cable TV system than those used for a broader TV market receiving cable, satellite, and terrestrial TV, as well as newer methods such as Internet-delivered IPTV, or even wireless TV. Nielsen currently has no plans for measuring TV on those platforms, although it says it is continuing to talk to cable and satellite operators about getting access to their set-top data as a means to supplement its sample-based methods.

While erinMedia's approach may seem like something of a hodgepodge, the reality is that Nielsen's methods currently are now. Nielsen derives its national TV audience estimates from a sample of 5,000-plus households equipped with people meters. It is rolling out a plan to generate TV ratings in the top 10 markets via local people meters, which will get its national sample up to 10,000 households. Other markets depend on either a hybrid approach of TV set meters, supplemented by paper diaries, or in the smaller markets, simply paper diaries.

Nielsen also is developing a wide range of new technologies and sampling methods to measure TV viewing, including everything from "mailable" electronic diaries to "talking" people meters. It's also exploring sophisticated mathematical formulas and computer programs utilizing heuristics as a means of measuring TV viewing in the future. It acknowledges it has no plans yet for measuring wireless TV--either inside or outside the household.

And of course, Nielsen is working with Arbitron to research and develop a portable people meter system, which Arbitron hopes to roll out to all the major markets, but which Nielsen is considering introducing to major markets below the top 10.

All this makes for a highly convoluted TV audience measurement infrastructure, but as Nielsen has indicated, that is because the TV marketplace itself has grown convoluted as a result of new technologies.

Meanwhile, a third player has quietly entered the U.S. TV ratings marketplace, utilizing a method that is much more like erinMedia's than Nielsen's. Taylor Nelson Sofres, a big player in media and marketing research outside the U.S., has begun working with Oceanic Time Warner in Honolulu to generate TV ratings based on its digital set-top data. Unlike erinMedia, which plans to model the demographic composition of the TV audiences it tracks, TNS has created a sub-sample of several thousand households from Oceanic's 397,000 subscribers, which will provide demographic data.

George Shababb--COO of TNS Media Research, the U.S. arm that oversees TNS Media Intelligence/CMR, a company that competes with Nielsen's ad tracking services--told a roomful of agency and cable operator executives that TNS "has got some other things" in development. While he declined to elaborate, he told attendees at a Carat Digital Exchange meeting in New York: "The whole landscape is changing because of digital. You can't fit round pegs into square holes."