Arbitron Grilled by House Committee

Arbitron and its portable people meter service took a beating Wednesday (Dec. 2) during a hearing called by the House Oversight and Government Reform Committee. From the opening gavel, Rep. Edolphus “Ed” Towns (D-N.Y.), chairman of the committee, set the stage, taking Arbitron to task for a service that could “drive minority broadcasters out of business.”

After hearing testimony from witnesses, Towns gave Arbitron 30 days to come up with a realistic plan to address the concerns of PPM critics, including problems with its sample; insufficient training for PPM panelists; and Media Rating Council accreditation, which Arbitron has yet to receive in 31 of its 33 markets.

“Arbitron seems to take the MRC’s code of conduct as a mere suggestion. This approach must change,” said Towns, whose committee has been investigating the effects of the PPM service on minority broadcasters since June. “I’m willing to go to legislation, but I’d like us all to work together.”

Since Arbitron began rolling out the PPM two years ago, a coalition of minority broadcasters, fearing disproportionately low ratings will negatively impact revenue, have lobbied hard to get legislators and regulators involved in their fight. In addition to the House Oversight Committee, Arbitron has been under fire and settled with four state Attorneys General. The Federal Communications Commission has also started a formal inquiry.

No new complaints from Arbitron’s critics surfaced Wednesday, but it quickly became clear that if Arbitron had MRC accreditation for more of its PPM markets, the discussion would have been markedly different.

“The MRC has ongoing concerns,” said George Ivie, executive director of the MRC and one of the panelists. In Riverside-San Bernardino, Calif., one of the two markets where Arbitron has accreditation, the MRC has found that performance metrics have declined since the market was accredited. “Arbitron needs to demonstrate it can sustain performance. Because it hasn’t been sustained in Riverside,” Ivie said.

Michael Skarzynski, president and CEO of Arbitron, reiterated the company’s commitment to the MRC and making improvements in its service.

“We don’t feel our service is flawed. For nine markets, including New York, our performance is strong and we’re performing at a level that deserves MRC accreditation. We welcome suggestions for improvements. We’re making improvements,” Skarzynski said.

But others think Arbitron is too slow or is delivering too little too late. “Had [Arbitron] addressed problems in the early audits, we wouldn’t have 33 markets with identical flaws. It gets more difficult and more costly to fix. Unless there is some stoppage, we will have to live with this until there is no diversity in radio,” said Ceril Shagrin, executive vp of corporate research for Univision Communications, which has refused to encode its stations in three markets.

Other than Skarzynski, only one other panelist defended the PPM. “I do not believe PPM is to blame for the problems facing some minority broadcasters,” said Alfred Liggins, president and CEO of Radio One, the nation’s largest Urban broadcasters. “PPM does not discriminate against minority stations. There is always a learning curve with a new service.”

Towards the conclusion of the hearing, after Charles Warfield, president and CEO of ICBC Holdings, itemized 40 percent to 60 percent rating drops for several of the company’s stations, Rep. Darrell Issa (R. Calif.) asked a simple question: “Would you be here today if the PPM said your ratings were 40 percent higher?”