Local TV Audience
2006 Annual Report
Arbitron: A New Player in the Research Game
Arbitron, the leading radio ratings company in the U.S., re-entered the field of television research in 2005 and added a new dimension to the ratings debate. The company used its Portable People Meters (PPMs), which can encode and log any type of audio, in Houston in September 2005 to measure TV ratings for the first time. The test and market demonstration had a sample of roughly 2,000 people from about 800 households. Some 40 to 50 cable networks and 15 TV stations participated by specially encoding their programming.
Nielsen Media Research gave Arbitron access to its meter/diary television audience estimates in Houston so the industry could compare the Nielsen ratings to audience estimates produced by the Portable People Meter system. The results showed that the PPM ratings patterns from Houston were similar to the ratings trends seen in Nielsen Media’s local people meter markets with one major exception: ratings were higher with the PPM, in part because it could track out-of-home viewing.13 That is a critical measurement advantage for Arbitron, given that people are watching or being exposed to TV in work or leisure places more than even before. In the preliminary findings from Houston, Arbitron data suggested that out-of home audience is about 14% of the total audience.14
The new developments were received enthusiastically by a number of TV groups, especially those who object to Nielsen Media’s LPM. But whether Arbitron will expand rapidly in TV markets is still a question mark. Arbitron is involved in a more detailed examination of the audio detection capabilities of the PPM and of the research, business and financial implications of a potential joint venture with Nielsen Media Research. Such a step could enable the PPM to serve as a central local market ratings service for radio and television.
The fate of this service will depend on Nielsen Media Research, which hasn’t made a decision yet, and would potentially imply a single ratings currency for radio, TV and cable.15 Nielsen Media Research has a considerable stake in the decision, aside from the rivalry and ego issues between the two companies. The company has spent years developing its own (costly and controversial) Local People Meter, which is now in nine markets. If it suddenly threw its weight behind the PPM, it would amount to an admission that its LPM is the inferior of the two measurement tools.16 That accounts for the time it is taking in reviewing the possible partnership. A decision was expected around the first quarter of 2006.