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Networks Give Nielsens a Low Rating

Television: Calling the firm's method inaccurate and antiquated, NBC, CBS and ABC are investing in the test of an alternate system.


NEW YORK — Nielsen Media Research, the company that measures America's viewing habits for the television industry, is getting low ratings from its highest-paying customers--the networks.

"The Nielsens are an antiquated, inaccurate monopoly that hasn't kept up with the way people watch television today," said Don Ohlmeyer, president of NBC West Coast. "Norway has better TV measurement than we do in this country."

NBC, CBS and ABC have joined together to finance the testing of an alternate system in the Philadelphia area by New Jersey-based Statistical Research Inc. And Chase Carey, the chairman of Fox Broadcasting, has threatened legal action against Nielsen to force the company to improve its service.

At issue is a ratings system that determines the placement of billions of dollars of TV advertising each year. The Nielsens--a measurement of TV viewing based on a sample of several thousand TV households--is the yardstick for measuring a program's success or failure. The size and demographic makeup of the audience determines how much money can be charged for commercial time.

The networks contend that Nielsen overreports cable-TV homes in its sample and underreports TV viewing by people less than 50, leading to higher ratings for the cable networks and lower ratings for youth-oriented Fox and other broadcasters.

"In their sample, Nielsen has a percentage of cable-wired homes--68%--that is 3 points higher than the percent reported in census figures nationally," said Nicholas Schiavone, NBC's vice president in charge of research. "They overrepresent college-educated people and underrepresent younger viewers. They don't count viewing by visitors to homes and viewing outside the home. And they use a system that is so intrusive in terms of wiring the TV set that only 37% of the people they ask to respond agree to participate and then provide meaningful data over time."

Broadcasters also question discrepancies between national and local ratings for their programs.

Nielsen executives say that their broadcast customers are simply killing the messenger by bringing them the bad news that broadcast ratings are down amid a proliferation of TV channels. ABC, CBS and NBC, which once accounted for 90% of the viewing done in prime time, collectively garner about 53% today.

"The TV business is not as easy as it used to be, and some of our customers do not want us to give a fair accounting of the story," said Barry Cook, vice president of methodological research at Nielsen. "The broadcast networks are presenting their new fall schedules to advertisers this week, and a lot of money is at stake. . . . You can improve your ratings with better programming--or by blaming the research."

"We're not complaining because we don't like the numbers; we're complaining because we don't think the numbers are accurate," NBC's Schiavone said. "We're leading the charge on this, and we're the No. 1 network."

Nielsen, a New York-based unit of the Dun & Bradstreet Corp., has made some changes in response to the networks' criticism. It is in the process of boosting its sample from 4,000 to 5,000 homes, which it expects to reach by the end of the summer. And it has implemented new techniques for improving cooperation levels among the people who sign up to allow the company to attach a device to their TV set that monitors what gets watched and feeds the information to Nielsen computers.

With increases in the sample size, Cook said, the system's response rate currently stands at 60%--not the 37% rate cited by Schiavone, who said that figure comes from an independent analysis of the Nielsen data.

As for the numbers that the networks don't like, Cook stands by the Nielsen data that reflect a significant drop in TV viewing by kids and a slight decline in viewing by 18- to 49-year-olds over the last several years. How does he account for the difference in cable TV households between Nielsen and the U.S. census? "Some people have cable who don't want to say how they got it," he said, alluding to the fact that some people have illegal hookups for which they don't pay.

Broadcasters have competing self-interests that show up in their current battle with Nielsen. For example, sources say that when Fox suggested that Nielsen oversample households with young people, an NBC executive fired a fax to Nielsen saying that idea was unacceptable to his network.

Despite their differences, executives at all four networks are united in their anger at Nielsen's response to their complaints.

"They've sent us a letter saying they'll modernize the system--if we pay more for it," one TV executive said. "That's unacceptable."

"Nielsen is in denial," Schiavone said. "Adding to [the size of] their sample is like dressing a corpse--there still are problems with the validity of their data."

Nielsen has had a monopoly in both national and local TV ratings in recent years since two competitors left the business because of lack of support. The Philadelphia test could be the beginning of the networks' bankrolling a rival to Nielsen.

The new system uses technology that the broadcasters say is more user-friendly than the Nielsen equipment and thus will get a higher rate of cooperation from the people using it. They also tout the SRI system as being more representative of the U.S. population than Nielsen's and for engaging every member of the household in the measurement of viewing.

"SRI certainly could be a viable alternative," said David Poltrack, vice president of research at CBS. "As things stand today, Nielsen has no incentive to make changes."

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