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Posted By	Discussion Topic: F.Y.I.:Arbitron finally out of the dark ages?
windowlck	posted on 07-12-2001 @ 10:02 PM
Psychopath Registered: Oct. 00	Hey guys, I pulled this from today's WALL STREET JOURNAL. For a long time I’ve felt that the practice of "Radio Diaries" by volunteers is ridiculous & totally inaccurate. But maybe now we will finally be able to know who is really #1 in NY. I just hope that this new system goes into effect soon. _____________________________________________ Arbitron Is Counting On New Meters To Measure Radio, TV Audiences By JENNIFER ORDOÑEZ Staff Reporter of THE WALL STREET JOURNAL When El Paso, Texas, radio-station managers received the winter ratings this past April, something had clearly gone awry. Two small Spanish language stations across the border in Mexico were listed in the rankings with surprisingly strong numbers. Arbitron Inc., the research company that provides the ratings on which most U.S. radio advertising rates are based, started an investigation. It eventually determined that one person had skewed the results by filling out six diaries. For more than 35 years, Arbitron has measured radio audiences by getting a small sample of consumers to document their listening habits in diaries, a system that even Arbitron now concedes is antiquated in large markets. Knowing it needs to modernize -- and eager to maintain its grip on the ratings business -- Arbitron is in the testing stage of a new measurement system that could result in a $100 million overhaul of its ratings operation. The company is pinning its hopes on a new system that uses "portable people meters," beeper-like devices that can electronically measure every radio, television and cable broadcast a person takes in. The system requires users to carry the device -- clipped to clothing, in a purse, even strapped to their chest in a special case -- during all of their waking hours for six months to a year. The device detects any radio station that agrees to have its signal specially encoded. If left dormant for about 20 minutes, the meters, which have motion sensors, are designed to blink rapidly. If that happens too often, users will receive a call from Arbitron. At night, the meters will sit in cradles that transfer the day's input to Arbitron. Key to the success and financial viability of the new measurement devices is their ability to measure TV and Web broadcasts, information that the company hopes to sell to markets beyond radio. Arbitron will finish the initial phase of its first U.S. test of the new technology this fall and expects to release preliminary results of the 300-person trial to programmers later this summer. But a significant obstacle looms in the way of a broader rollout: reluctance by Clear Channel Communications Inc., the nation's most powerful radio company, with more than 1,200 stations, to continue using even Arbitron's current rating service. In April, on the day of Arbitron's initial public offering, Clear Channel announced that it didn't intend to renew its contracts with Arbitron in some major markets. That could cost Arbitron a $28 million chunk of its annual revenue and potentially hamper the people meter's further development. Nielsen Research Inc., which has a potential stake in Arbitron's people meter, measures what people are watching on television with electronic devices that are connected to or implanted in individual sets. But the main criterion to effectively measure radio consumption, industry watchers say, is portability. Most people listen to radio in their cars or in transit, where they are unlikely to whip out a diary after they change stations or reach their destination. A typical household might have five radios, making it difficult and expensive to measure what is played on each one. Even Arbitron concedes that its current system for measuring that complex market has problems. Each year, it sends paper booklets to hundreds of thousands of randomly chosen people in radio markets across the country, rewarding them with as much as $7 for chronicling everything they hear on the radio for a week. Although it says it takes pains to ensure the integrity of the surveys, most of the books sent out never come back. Even worse, when they are returned, the results are often incomplete. The company believes its new device will provide a much more accurate picture of radio consumption than the diaries, which many radio programmers suspect are often filled out at the end of a test week by participants too busy or forgetful to keep up incrementally. The meters are designed to be worn by everyone in a given household over the age of five. Currently, only the listening habits of those 12 and older are measured. "If everything works -- and we don't know that yet -- this could be a significant improvement in the way we measure radio," says David Kennedy, president and chief operating officer of Susquehanna Radio Corp., which has 33 stations. If the early results are well received, the company will expand its tests to other markets with hopes of rolling out the new meters in the next few years. But for that to happen, the company will have to persuade hundreds of thousands of people a year to wear devices for at least six months in exchange for menial pay and small prizes. Getting Clear Channel on board could also prove tricky. When Nielsen began electronically measuring television viewership in the 1980s, the more precise method resulted in ratings drops for the big broadcast networks, and the same is expected to happen in radio. For the biggest radio companies, like Clear Channel, even a small downturn in ratings can mean millions of dollars in advertising revenue. Arbitron and Clear Channel have been negotiating since April. Neither will comment on the talks, though Clear Channel says it has informed shareholders that it no longer intends to do business with Arbitron in many markets. But analysts say both companies probably have too much at stake to let that happen. Arbitron, which says it doesn't expect to increase profits during its first year as a public company in part because of research costs, needs Clear Channel's cooperation to continue rolling out its new technology. And Clear Channel, which, according to analysts, does $1 billion a year in advertising based on national ratings, would have difficulty negotiating favorable rates without Arbitron ratings. "For everyone," says Keith Fawcett, a media analyst with Merrill Lynch, "this is basically high-risk poker." Write to Jennifer Ordoñez at [email protected] "What are you gonna do?Release the dogs?! Or the bees?! Or dogs with bees in their mouth so that when they bark they shoot bees at you?"

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