• by Joe Mandese , July 26, 2006

Weeks before the launch of a new cable TV network, Nielsen Media Research has officially rejected the network's request to purchase Nielsen's ratings data, citing the fact that the network's owner has been critical of Nielsen's methods and management. The network's owner, outspoken multimillionaire Frank Maggio, who also owns Nielsen ratings rival erinMedia, says Nielsen's decision to bar access to its ratings to a new TV channel is unprecedented, illustrates its capricious monopolistic control over the TV industry, and is threatening new action if Nielsen does not alter its position by the time the new channel, ReacTV, launches Aug. 8.

Maggio, of course, has already filed two federal suits against Nielsen, including an antitrust suit claiming that Nielsen's business practices bar new competition from entering the TV ratings marketplace. ReacTV originally was a party to that suit, but a federal judge previously ruled that ReacTV had no grounds for the claim, allowing erinMedia to proceed with the case. In preparation for the case, the lawyers of the two companies have been sharing information through the legal process known as "discovery," and depositions of key executives are expected to begin next month.

Nielsen spokesman Jack Loftus declined to comment on the company's decision to reject ReacTV's request to buy its ratings data, noting, "it's all in the hands of the lawyers."

Maggio, however, maintains that Nielsen is penalizing one company, fledgling cable TV network, ReacTV, for the actions of a potential Nielsen competitor, erinMedia, and for his own public criticisms of Nielsen and its management. "One thing doesn't have anything to do with the other," he said.

Nielsen's Loftus countered, "Our contention is that it's all related and we'll let the court decide."

In a voice messages left for ReacTV President Noreen Parker on July 20, Nielsen General Manager of National Services Sara Erichson said, "Given the public statements made by your owner that Nielsen Service cannot provide adequate audience information about ReacTV viewers, as well as public disparaging remarks that he has made about our services as well as the management at Nielsen at this time we don't think that it is appropriate to commence business relationship with ReacTV."

Erichson's message went on to suggest that "in the event that circumstances change" in the future, "the two companies can pursue something at that time."

Maggio acknowledges that he has been extremely critical of Nielsen since launching erinMedia, a company that plans to provide TV ratings based on actual viewing data gathered directly from digital set-top TV devices, but says that Nielsen's decision to bar access to the data to ReacTV represents restraint of trade for a fledgling cable network.

"I'm a potential client that is trying to survive in an industry that relies on their ratings as currency," Maggio says, noting that even though erinMedia promises to provide more accurate methods, Nielsen data currently is the coin of the realm, and being blocked from access to that data would make it hard for ReacTV to gain access to cable TV distribution deals, and to convince some advertisers to buy into the network.

Maggio says ReacTV also received a letter from Nielsen's attorneys asserting that the TV ratings company has the "right to serve whoever they want," but he contends that the denial is without precedent, noting that bigger TV operators such as Fox and Univision have been highly critical of Nielsen's methods, and even filed suits against Nielsen, without being denied access to its ratings. Moreover, he maintained that a condition of Nielsen's industry accreditation from the Media Ratings Council is that it will provide equal and open access to its data to all members of the industry.

"They're not going to get away with this," Maggio tells MediaDailyNews, adding, "If on Aug. 8, the first full day of ReacTV, I don't have Nielsen ratings to show what I did, it's going to be their worst day."