Nielsen Credibility Battle Heats Up

NEW YORK – For years, television networks have privately grumbled about the company that counts their viewers, but the complaints rarely echoed outside of the industry. Now Nielsen Media Research (search) is in the cross-hairs.

A campaign waged by the Fox network's corporate parent and minority advocacy groups, who claim that a new ratings system undercounts minorities, culminates in a hearing Thursday before the Senate Communications Subcommittee (search).

The campaign tests Nielsen's credibility and is an effort to make a business monopoly more responsive.

"Nielsen is being very pigheaded," said Alex Nogales, president of the National Hispanic Media Coalition. "They don't seem to understand they have a very special responsibility to the public."

But Nielsen spokesman Jack Loftus responded that critics have damaged Nielsen's reputation without ever providing credible research to prove their complaints are valid. Nielsen would not make its president, Susan Whiting, available for an interview.

Nielsen's ratings are the currency used to set prices for television commercials, a business that approaches $50 billion a year. Shows with poor ratings often quickly disappear.

The company measures viewership in two ways:

_ There's a national sample, in which an electronic "people meter" is attached to the televisions of participating families and records what they watch.

_ Four months a year in individual markets, Nielsen takes a separate sample in individual markets with a different methodology: families fill out diaries of what they watch. You know them as "sweeps" months, when TV stations fill up on their best programming to pump up ratings.

Nielsen has begun replacing the diaries with people meters in local markets, first in Boston two years ago, and this year in New York and Los Angeles.

The company has a financial incentive for moving forward, since the changes will provide Nielsen with more detailed information it can sell to more clients. Fox says the company asked them to pay 25 percent more for local people meter samples.

Nielsen has admitted to being taken aback by the campaign.

"I think it's damaged our reputation," Loftus said. "This has been a deliberate assault on our reputation orchestrated by News Corp. They've put millions of dollars into a disinformation campaign."

The irony is that the company has spent years hearing networks plead for updated technology, he said.

"They were really behind us," he said, "until they looked at their numbers."

Although Nielsen stands by its work, the independent Media Rating Council (search) decided late last month not to recommend accreditation of the new service, without saying specifically why.

No one — not even Nielsen's critics — argues that diaries are better than people meters. Asking people to remember and write down what they watched each week was simple when homes had one TV with three or four channels; not so with multiple sets, hundreds of channels and remote controls that allow easy surfing.

Yet networks became alarmed when people meter tests in New York and Los Angeles showed big differences from the diaries. Some shows popular with minorities such as "The Parkers" and "One on One" dropped sharply in the ratings.

News Corp., which owns Fox and some UPN stations in big cities, hired a Washington consulting group led by former members of the Clinton administration to orchestrate a campaign with the slogan "Don't count us out."

They believe Nielsen hasn't worked hard enough to build samples that accurately reflect diverse marketplaces.

In an example cited by top CBS researcher David Poltrack, 21 percent of the people identified as "black" in the New York people meter sample were Spanish-speaking. In the group of people filling out diaries, that number was 11 percent.

As a result, the people meter results showed significantly fewer blacks watching programs like "The Parkers" and far more watching Spanish-language television. Demographically, the truth is somewhere in the middle, he said.

Fox executives also believe that the people meters, which require participating families to punch a remote control-like device frequently to identify each person watching, takes some getting used to. Younger viewers — the kind Fox depends upon — are more likely to let it slide.

"The sample is getting better every day," Poltrack said. "But there are still issues and there's no reason for not taking the time to get it right."

To quiet some of the criticism, Nielsen said it would run the diary and people meter systems side by side in New York and Los Angeles for one month.

The New York results (Los Angeles began operating only last week) have shown fewer differences, outside researchers say. Unfortunately, the diary system is becoming less reliable as a benchmark.

"They don't have the resources to keep two things up," said Alan Wurtzel, NBC's chief researcher. "I think they're very distracted and they're spread very thin. They're just running around trying to put out separate fires."

Although the Boston launch received much less publicity, it had some of the same problems, said Fred Reynolds, chief executive of the CBS stations group. Major network affiliates wouldn't subscribe to the service for more than a year, applying financial pressure to force improvements, he said.

To some degree, the fight in New York and Los Angeles may be an opening skirmish.

By 2006, Nielsen wants to double the size of its national sample to 10,000 families, using many of the people who also participate in the local measurements. The real worry is that the national numbers will show the same viewership drops seen in the cities.

The Spanish-language station Univision unsuccessfully sued to block Nielsen's new system from starting in Los Angeles.

Otherwise, despite those years of grumbling, other networks have conspicuously stayed away from News Corp.'s campaign. Some executives privately believe a tradition of working out problems internally between Nielsen and the networks is best. They worry about a damaged Nielsen because there's no immediate alternative.

"I think that News Corp.'s end game is to so thoroughly discredit Nielsen that the government will allow them to come up with a ratings system that the industry can control, and that system will be designed to give them higher ratings," Loftus said.

The people behind the campaign said they ultimately want to make sure that Nielsen is more responsive and accurate.

"We think, at the end of the day, people will have greater confidence and faith in a ratings service that has been subject to scrutiny and held accountable for its accuracy," said Tom Herwitz, president of Fox station operations.

News Corp. is the parent company of the Fox News Channel, which operates FOXNews.com.