N.Y. Attorney General initiates investigation into Arbitron's PPM

By Katy Bachman
Mediaweek
(September 10, 2008) Pressured by a group of Hispanic broadcasters and Inner City Broadcasting here, New York Attorney General Andrew Cuomo has initiated an investigation into Arbitron's portable people meter system.

Arbitron received a subpoena Tuesday from the AG's office requesting documents dating back to 2003. The company has until Sept. 19 to produce the paperwork.

The broadcasters seeking government intervention fear lower ratings and revenue with the PPM, claiming Arbitron's methodology undercounts African-Americans and Hispanics.

The same group of broadcasters also petitioned the Federal Communications Commission to open an investigation.

The FCC, which regulates the nation's airwaves, last week set comment dates to determine whether it should investigate. Arbitron has maintained the FCC has no jurisdiction over media research firms.

Arbitron is set to commercialize the PPM service as the ratings currency next month in New York and seven other top markets. It currently has two PPM markets in Houston and Philadelphia. Only the Houston market has received accreditation with the Media Rating Council.

"Because of Arbitron's virtual monopoly over ratings in the radio industry, a significant and improper decline in ratings under the PPM methodology could cause minority stations to suffer drastic reductions in advertising revenues. This, in turn, could severely harm minority broadcasting in New York," wrote Cuomo in a Sept. 9 letter to Steve Morris, chairman, president and CEO of Arbitron and Timothy Smith, evp and chief legal officer, legal and business affairs.

In response, Arbitron reiterated its argument that the PPM service is more accurate than the diary. "The PPM radio ratings service is fair, reliable and fully represents the diversity of New York radio markets. The media industry has demanded a more precise and credible measurement tool for radio just as they have for other media," the company said in a statement.

Arbitron also implied that government involvement could undercut the importance of the Media Rating Council, created at the direction of Congress 40 years ago to audit and accredit media ratings services. The AG's exhaustive list of requested documents included information and reports pertaining to the Media Rating Council.

"The media industry should be concerned about the attempts to supplant or short-circuit the Media Rating Council accreditation process," Arbitron said.


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