SBS Pulls PPM Encoders Again

Spanish Broadcasting System has pulled the encoders from its stations again, leaving its ratings performance in the dark for advertisers. The broadcaster disconnected from Arbitron’s portable people meter system soon after a New York Supreme Court judge lifted the February temporary restraining order that required SBS to continuing encoding nine stations in five PPM markets.

As a result, SBS stations in New York, Los Angeles, Chicago, San Francisco and Miami will go unrated, while Arbitron pursues its legal action against SBS. The two parties earlier this week informed the judge they had chosen a mediator.

SBS and Arbitron have been duking it out since late last year, when Arbitron, owed $2.5 million from SBS, stopped providing SBS with ratings. SBS retaliated by pulling its encoders. Arbitron sued SBS and the matter ended up in the New York Supreme Court for the County of New York.

The Court lifted the order requiring SBS to encode arguing that Arbitron failed to prove that the loss of SBS would cause “irreparable damage.”

“Arbitron has not submitted any actual proof of its claim that SBS’ breach of the Encoding Agreement will devalue the ratings Arbitron provides to other subscribers and harm its reputation and credibility,” the Court wrote.

The Court rejected Arbitron’s claim that in the markets where SBS operates, the company accounted for 12 percent of Arbitron’s total revenue. Arbitron was seeking $1 million in damages for SBS’ encoding breach.

“We respect the court’s decision but are disappointed and believe that the radio industry is best served when all broadcasters in a market are encoding their signal. SBS remains a valued client and we intend to continue to engage with them in an ongoing dialogue in order to achieve resolution,” Arbitron said in a statement.

With less than three weeks of encoding its signals during February, SBS station ratings took some big hits, more than 30 percent in New York and Miami, for example.

The issue of encoding is critical to the credibility of Arbitron’s PPM service, which cannot produce ratings for stations unless radio signals are encoded. Arbitron’s service is already compromised in Miami, San Diego, Phoenix, San Antonio and Las Vegas. Those markets do not include ratings for Univision Communications, which last summer ceased subscribing to Arbitron’s PPM service in all markets except Houston and refused to encode in newer PPM markets.

Arbitron’s roll out of the PPM—now in 33 markets, but which has only been accredited in three by the Media Rating Council—has been rocky. Minority broadcasters have consistently argued the PPM methodology undercounts minorities, pulling in government regulators to wrestle improvements in the ratings service.

As a result of one congressional hearing held in December, Arbitron and the PPM Coalition, a group of minority broadcasters including SBS, agreed to come up with a working plan to resolve differences. So far, there is no work of a plan, just a few brief comments from Arbitron that the two parties were making progress.

Related: N.Y. Court Orders SBS to Encode

Related: SBS Appeals to FCC