FAIR and Unfair – Players Take Sides on Ratings Act

This week has seen a rush of activity in the controversy over Nielsen Media's LPM introduction and Senator Conrad Burns' FAIR Ratings Act. Leading associations of US advertisers declared their members' opposition to the bill on Tuesday, while Nielsen's critics spoke out before a Senate Committee on Wednesday.

The Act, introduced three weeks ago [DRNO www.mrweb.com/drno/news4257.htm ], seeks to replace the current system of voluntary accreditation of TV ratings systems with a requirement for compulsory approval from the Media Rating Council (MRC). LPMs have so far received full MRC accreditation in only two of the seven markets in which they have been introduced.

Both the Association of National Advertisers and the American Association of Advertising Agencies have this week come out against the bill. A statement on Tuesday 26th from the ANA says it 'strongly supports the self-regulatory television ratings process as administered by the Media Rating Council (MRC). We believe the current system works effectively and therefore, we do not support the proposed FAIR Ratings Act, a bill that will mandate the federal government to regulate television ratings...' The statement cites two main reasons, the advertising industry's 'long and productive history of self-regulation' which means it 'opposes government intervention unless absolutely necessary'; and a belief that FAIR would stifle the development and implementation of new products, services and technologies, with the possibility of 'a protracted, government-mandated accreditation process'. The association says it surveyed committee members on the issue and found that a majority oppose legislation.

On Wednesday (July 27) NMR President and CEO Susan D. Whiting testified before the Senate Committee of Commerce, Science and Transportation, answering strong criticism from both ex-employees of Nielsen and some of the major broadcasters who have been key opponents.

The Committee heard from ex-Nielsen employee Gale Metzger who said the company had invited disaster by 'force feeding change', while Patrick Mullen, President of Tribune Broadcasting, told the hearing that his company and 17 other broadcasters had written to Nielsen in May asking that it postpone further LPM launches until those already rolled out were officially declared 'reliable' by the MRC.

Whiting 'affirmed Nielsen's commitment to work with clients and community leaders through a free-market process to ensure transparency and accuracy in the ratings'. She said that since last appearing before the committee in 2004 her company had 'worked very hard to follow your advice and to make a superior measurement system even better', and reminded it of the conclusion of the Federal Trade Commission on March 30 this year that in Nielsen's case, 'well constructed industry self-regulatory efforts can be more prompt, flexible and effective than government regulation.'

Whiting said she believes the Act 'is both unnecessary and harmful to the long-term interests of the entire television community' but added that 'if MRC members and the measurement companies approve the Code, Nielsen would abide by it.'

Going further, Whiting / Nielsen's statement said the Act would 'slow innovation to a crawl... because a process of accreditation governed largely by politics and economic self-interest could take years. Confronted with the prospect of developing and testing rating services for a prolonged period without generating any revenue, it is unlikely that companies would attempt to introduce expensive new systems. Circumstances such as this also would create a significant barrier to entry into this market by any competitors'. However, potential competitor erinMedia has already stated this week that t supports the bill.

Kathy Crawford of media buyer MindShare, backed Nielsen's stance saying it had 'not decided to offer LPMs in a vacuum. This was a collective decision reached by the entire television industry'. She suggested that the Burns bill would stifle innovation by giving five or six major media companies represented on the MRC board the power to delay new systems which would 'hurt their bottom line' regardless of the quality of their data.

Several minority media companies, including BET, TV One and the Latin Business Association have also stated their opposition to the legislation, as have Comcast and the Reverend Jesse Jackson, while the National Association of Broadcasters has come out in support, along with original complainants Fox Television and major player Tribune Broadcasting.

Nielsen Media is online at www.nielsenmedia.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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