New Competitor Threatens To Outdo Nielsen Research

Florida real estate developer and budding media magnate Frank Maggio thinks he’s developed a better way to produce TV ratings than Nielsen Media Research. But Maggio’s plan requires access to the detailed viewing data contained within the 25 million digital set-top boxes being used by cable U.S. TV subscribers—access he does not yet have.

After several years of testing, Maggio says he will now call on cable companies such as Comcast and Time Warner to take investment stakes in his research firm, erinMedia, in exchange for the data as he prepares to launch a national ratings service to compete with Nielsen.

Maggio believes that ratings ought to take into account as many viewers as possible and that the 25 million set-top boxes now deployed serve as ratings meters that provide “second-by-second” viewing data. “We can take a census, so why use just a sample?” he said, referring to the 10,000 household sample that Nielsen uses to estimate ratings.

Nielsen, which like Adweek is owned by the soon-to-be sold VNU, declined comment.

Would-be clients—agencies and networks—are open to his plan and say there is room in the complex world of media research for Nielsen, Maggio and others to compete. Indeed, other research companies say they’ll compete with Maggio for access to the cable viewing data—including Nielsen itself, as well as TNS Media Research, which recently struck a deal with Charter Communications to gather set-top viewing data from 200,000 homes in the Los Angeles market. As part of that deal, TNS is selling that data to agencies and networks, said George Shababb, head of the company’s media research unit.

Whether the cable MSOs cooperate in a national ratings venture remains to be seen. Comcast was noncommittal last week. “We’re exploring all options,” said Andrew Ward, vp of strategic alliances, Comcast Spotlight. “We’re working with Nielsen [on a test basis], and we’d consider working with [Maggio] too.” Time Warner officials said it was open to Maggio’s pitch.

Maggio is nothing if not brash. He’s already filed lawsuits against Nielsen on antitrust and fraudulent advertising grounds. “Nielsen’s days are numbered,” he said in an interview, before publicly disclosing his plan for the start-up ratings service at an Advertising Research Foundation conference in New York last week.

It’s that level of exuberance that prompts media research and ratings expert Gale Metzger to call Maggio a “fresh breath of air” for the media industry. Of all people, Metzger knows that Maggio faces a daunting task in taking on Nielsen. Metzger’s ratings company, SMART Initiative, which rose and fell in the mid-1990s, is just one of the companies in the boneyard of defunct ventures that has challenged Nielsen over the years. Others who tried and failed were Audits of Great Britain in the late 1980s and Arbitron in the early 1990s.

But now, the media marketplace is too complex for one company to do it all, said David Poltrack, evp of CBS. “We’re entering a phase of multioperationalism,” he said, where measurement of media and metrics will be handled by different research firms. It’s possible, he said, that Nielsen’s sample-based ratings service will continue, while Maggio launches a competitor using the detailed cable viewing data. Arbitron may end up being the research company of choice for out-of-home audience measurement, while IAG Research may corner the market on engagement-related measurement, he said.

Others agreed. “We’ll wind up with an amalgam system, rather than the unitary system we’ve had with Nielsen for the last 50 years,” said Tim Brooks, evp of research, Lifetime Entertainment.

But agency researchers have issues with Maggio’s plan. “What about non-digital cable households?” asked Susan Nathan, evp of research, Universal McCann. “We need to measure the entire population.”