Arbitron reaches agreements with NY and NJ Attorneys General in PPM lawsuit
Settlement calls for new methodologies, payments to NABOB, funding of advertising campaign

(January 7, 2009) Arbitron Inc. has announced that it has joined in a Stipulated Orders on Consent with the Attorneys General of the states of New York and New Jersey that will resolve all claims against the research firm in lawsuits filed in both New York County Supreme Court and Superior Court of New Jersey for Middlesex County on October 9, 2008.

The lawsuits alleged violations of consumer protection and civil rights laws in the marketing of Arbitron's Portable People Meter radio ratings service.

As part of the settlement, in which Arbitron denies wrongdoing or liability, the research firm will make a number of changes to its PPM-related methodologies.

Arbitron has also agreed to pay $100,000 to the National Association of Black Owned Broadcasters for a joint project between NABOB and the Spanish Radio Association to support minority radio. Additionally, Arbitron will fund an advertising campaign in the New York market promoting black and Hispanic radio.

In summary, within the PPM services in the New York and Philadelphia radio markets, Arbitron has agreed to:

- Recruit panelists using a combination of telephone number and addressed-based sampling methods beginning January 2009. Arbitron agreed to use the address-based sampling technique for 15 percent of our recruitment efforts for New York by July 2010 and for Philadelphia by January 2011;

- Increase the sample target for persons residing in cell-phone-only households in stages to 15 percent of the total New York radio metro sample target by July 2010 and in the Philadelphia radio metro by January 2011;

- Set a target of 20 percent for the Sample Performance Indicator (SPI) by 2011 and take all reasonable measures to achieve in the New York radio metro a minimum 15 percent SPI level by July 2009, 16 percent by October 2009 and 17 percent by June 2010, per the agreement with the Attorney General of the State of New York;

- Set a target of 20 percent for the Sample Performance Indicator (SPI) by 2010 and take all reasonable measures to achieve in the Philadelphia radio metro a minimum 15 percent SPI level by October 2009, 16 percent by April 2010 and 17 percent by December 2010;

- Take all reasonable measures to achieve average in-tab rates of at least 75 percent for all age/sex and race/ethnicity demo groups in New and Philadelphia by April 1, 2009, and, per the agreement with the Attorney General of the State of New York; ensure that subcategories comprising 10 percent or more of the New York Metro population fall within 90 percent of the overall 75 percent target; and to ensure that subcategories comprising 10 percent or more of the Philadelphia radio metro population fall within 85 percent of the overall 75 percent target;

- Make all reasonable efforts to obtain and retain accreditation for the New York and Philadelphia PPM radio ratings services from the Media Rating Council;

- Provide to subscribers monthly reports detailing the PPM sample sizes by individual zip code in the Philadelphia and New York Markets;

- Include a disclaimer on promotional material indicating that PPM ratings are based on audience estimates and should not be relied on for precise accuracy or precise representativeness of the New York and Philadelphia radio market; and

- Complete a non-response bias study in the New York market by July 15, 2009. Should the study indicate any measureable bias, Arbitron will use all reasonable measures to address identified sources of ratings bias within 6 months.

The New York and New Jersey Attorneys General reserve the right to rescind the Order and reinstitute the civil action, if the company has not obtained accreditation from the Media Rating Council for either its New York or Philadelphia PPM radio ratings service by October 15, 2009 and December 31, 2009 respectively, and also has not achieved all of the specific metrics in the agreement.

Commenting on the agreement, Steve Morris, chairman, president and chief executive officer stated: "Broadcasters, agencies and advertisers in New York can continue to use PPM measurement of radio without any hesitation or reservation. We are also pleased to be able to resolve this action within the framework of our continuous improvement program for the Portable People Meter ratings service in the New York radio market. These initiatives are sure to increase the accountability of radio to the benefit of all New York radio broadcasters and their advertisers."

Charles Warfield, President and Chief Operating Officer of ICBC Holdings, which owns seventeen radio stations, including two in New York City, stated, "This has been a long, difficult battle, and we are hopeful that the settlement negotiated by Attorney General Cuomo and Attorney General Milgram will restore some integrity to the ratings research process. If Arbitron complies with the terms of the settlement, PPM should be substantially improved. I hope our company and the radio industry, which must rely upon Arbitron's PPM data, will see more reliable and accurate audience data as a result of this settlement."

Both the National Association of Black Owned Broadcasters (NABOB) and the Spanish Radio Association (SRA) issued statements praising the Attorneys General of New York and New Jersey for taking on Arbitron and winning changes to PPM. NABOB is now asking Arbitron to agree to apply the terms of the NY and NJ settlements to all PPM markets. Otherwise, it warns of more litigation.

"Unfortunately, this settlement only applies in the New York City and Philadelphia markets. As Arbitron continues to roll-out PPM in other markets, we hope that other jurisdictions will consider compelling Arbitron to extend the terms of this settlement to their markets. This ongoing litigation is not good for Arbitron, minority broadcasters or the radio industry," said NABOB Executive Director Jim Winston.
 
"Therefore, NABOB will ask Arbitron to agree to the terms negotiated in New York and Philadelphia for every market in which it has rolled-out, or is planning to roll-out, PPM.  Absent such an agreement by Arbitron, the problems identified by the New York and New Jersey Attorneys General will continue to plague broadcasters in every other market in which Arbitron has imposed or will impose its PPM system," he said.

"We hope we won't have to fight this battle in every market where Arbitron is rolling out PPM, but absent an agreement by Arbitron to make this a nationwide settlement, this battle will continue," Winston warned.


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