Arbitron Commercializes Early, Wants Legal Relief

Arbitron moved up commercialization of Portable People Meter ratings by two days, making the transition from paper diaries to measurement by the passive electronic measurement device today. The move comes on the heels of Friday's legal action by New York State Attorney General Andrew Cuomo asking a U.S. district court to delay the commercialization of PPM ratings in New York. Arbitron also filed a counter-action asking the court to dismiss Cuomo's filing.

The accelerated commercialization schedule makes PPM ratings the official currency for ad sales in eight new markets: New York, Los Angeles, Chicago, San Francisco, Nassau-Suffolk, Middlesex-Somerset-Union, Riverside-San Bernardino and San Jose.

As part of the advanced rollout, Arbitron issued PPM data for September and also declared that July and August PPM results will now be considered official "currency" data in these markets. This data was originally part of the "pre-commercialization" phase that Arbitron typically implements in each market to allow radio broadcasters and advertisers to become familiar with PPM ratings.



In its court filing, Arbitron argued that PPM ratings are protected by provisions of the U.S. and New York State Constitutions, including the First Amendment protecting freedom of speech. It also asserted that delaying PPM ratings would harm the radio industry generally, and the company in particular. Since the company is publicly traded, this means its stockholders would suffer injury as well.

Cuomo is seeking to delay PPM ratings because of "fraudulent and illegal business practices"--in essence, accusing Arbitron of deceiving the radio industry about PPM's readiness and rushing the system to market despite methodological flaws.

These flaws include a failure to accurately represent minority audiences, which Cuomo says violates New York State's civil-rights laws. Legal action appears to be motivated by the fear of some minority broadcasters that PPM measurement will undercut their ratings, leading to big drops in ad revenue--a phenomenon they blame on flawed sampling methodology associated with PPM.

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