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Copyright 1991 Newsday, Inc.  
Newsday

 

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April 21, 1991, Sunday, ALL EDITIONS


SECTION: THE NEWSDAY MAGAZINE; Pg. 8

LENGTH: 4050 words

HEADLINE: Trouble in Nielsenland;
TV shows live or die by their Nielsen ratings, but television executives dispute their accuracy. At stake: billions of dollars in ad revenues;
TROUBLED DIARIES-

BYLINE: By Adam Snyder. Adam Snyder is a freelancer who writes frequently on the media and marketing.

BODY:

 
THE Push-Button Players Present "An Evening at Home," With Tom, Jane, Bobby, Grandpa and, Yes - The People Meter!

After dinner, Jane walks into the living room while her husband, Tom, loads the dishwasher. She turns on the TV and a red light on the "people meter" - a small box on top of the set - lights up. She presses her assigned button on the remote control until a green light flashes. She presses the "OK" button and the flashing stops. Three minutes into "Cheers," Tom enters the living room. He begins staring at the TV, so Jane quickly hands him the remote so he can punch in his own code, then hit the "OK" button to signify everything has registered correctly.

Tom offers to make coffee, then presses his buttons to tell the meter he isn't watching. Now son Bobby bounds downstairs. Jane hears the basketball game on his TV upstairs, and asks if he remembered to log off his meter. He runs back up to log off, then returns and presses his buttons on the living-room meter. At the next commercial, Jane switches to a movie on Ch. 11, then a few minutes later to CNN. When Tom returns with the coffee, he sees three red lights blinking on the meter because Jane switched channels. He presses four buttons and the blinking stops.

The doorbell rings. It's Jane's father dropping off a gift. He begins watching, too, so Jane presses the "visitor" button on the remote, then punches in her father's age and gender.

If you believe that scenario, you'll believe anything, some people say - some powerful, influential people at America's three major networks.

But if you believe the A. C. Nielsen Co. - which is supposed to be the No. 1 authority on such things - that's precisely the kind of TV-watching routine followed by its 4,000 "Nielsen families" - those randomly selected button-pushing folk who remain publicly anonymous while providing the raw data that Nielsen transforms into this country's TV ratings.

If you listen to Nielsen's strongest critics - including all three networks, some TV programers and independent researchers - no human being could possibly watch TV this way. It's just not reasonable, they say, to expect people to punch two buttons on a tiny remote control every time they turn on the TV or change a channel or get up to grab some ice cream from the freezer.

As a result, there are complaints about the accuracy of Nielsen's figures. "There's really no telling how closely Nielsen's numbers correspond to reality," says J. Ronald Milavsky, a communications-science professor at the University of Connecticut. He is a former NBC researcher who spent several months analyzing Nielsen's procedures.

Still, Nielsen is no stranger to TV measurement, having dominated the ratings scene ever since Arthur Charles Nielsen began tracking radio listening in 1936. In 1950, as soon as network programing began, Nielsen issued the nation's first TV ratings. For the next 40 years, its word was gospel. Nielsen became a part of our language - like Xerox and Kleenex.

Today, when "Cheers" and "60 Minutes" are running neck and neck in popularity, everyone knows that Nielsen is the one keeping the score. Once a week, newspapers across America deliver that score in detail. In fact, not a day goes by when "the Nielsens" aren't mentioned in one way or another in the press. This continuous publicity helped turn the ratings into cash. In 1984 Nielsen looked like such a juicy plum that the business-information giant, Dun & Bradstreet, proceeded to gobble it up for $ 1.3 billion.

Each year advertisers use the Nielsen ratings to place 50 million commercials at a total cost of more than $ 21 billion - more than the gross national product of Kuwait before the Iraqis invaded. But the Nielsens influence far more than the direction of the nation's advertising dollars. They help determine the stock prices and prosperity of the nation's giant media conglomerates. They dramatically affect the fortunes of the major Hollywood studios (which make the shows that live or die by them), to say nothing of the 200 million Americans who can watch only shows the ratings allow to survive.

For years, Nielsen's clients - every top cable and broadcast channel and advertising agency - seemed perfectly satisfied with Nielsen's virtual monopoly. After all, the TV business wasn't all that complicated in its early decades.

It seems hard to believe now, but as recently as 1979 the average American home received fewer than seven channels and the big networks - ABC, CBS and NBC - accounted for more than 90 percent of all viewing. But then cable TV came along and jumped the average number of channels to 35. Today, Nielsen says the percentage of viewers watching the three networks has plummeted below 60 percent.

So now the Manhattan-based Nielsen ratings service not only has many more channels to measure, but is in the awkward position of delivering bad news to its biggest customers, the networks. And they must decide how to satisfy many new clients as well, all with different self-interests to protect.

Channels such as MTV want to make sure teenagers are pushing the right buttons. Nickelodeon is worried about children who can't even read Nielsen's meter instructions. Sports programers want Nielsen to count viewers in bars and restaurants. And the networks - oh, the networks! - are really up in arms. They want to bring their slide to a screeching halt, and they blame Nielsen for some of that slide.

Like many of us, Nielsen's clients have begun to wonder how accurately 4,000 families can portray the habits of 200 million Americans. They've formed committees with odd-sounding names - CONTAM, COLTAM, CONCAM - that keep firing off all kinds of recommendations telling Nielsen how to improve its system.

If you're like most of the TV-watching public, you look at Nielsen's weekly results and root for your favorite show, hoping it will rank high enough to avoid cancellation. But that's about the last consideration of Nielsen or its clients.

In fact, those who rely on ratings as their bread and butter disdainfully refer to the hot-program list you read every week as "the popularity contest." They not only aren't overlyconcerned about which TV programs are better; they refuse to worry about which ones make the public happy. They're so far inside their own groove of inquiry that they almost don't understand questions about how accurately Nielsen gauges the popularity of specific programs.

Here's what does interest them: Who is watching. Not how many, or how enjoyably. That's because (surprise) the TV business is motivated by dollars. And it's ratings that are the product. Don't believe it? "We sell ratings, not TV programs," says Nicholas Schiavone, vice president of media and marketing research at NBC. How unambiguous can you get?

As a result, Nielsen and its clients talk almost reverently about a TV program's demographics, or "demos." They want to know whether the viewers advertisers want most - women 18 to 49, for example - are watching. That's why the networks dwell on fancy research terms such as "cooperation rate" and "fatigue factor" instead of how the public really feels about "Twin Peaks" or "China Beach" getting axed for low Nielsens. WHAT'S that? You've never been approached by Nielsen? No one you know has been contacted? Well, be patient. Nielsen is in 4,000 of 90 million households - which means you have a one in 22,500 chance of being selected.

But sample size is the least of the networks' worries. They have been Nielsen's most aggressive critics because they have the most to lose. The Big Three were incensed when, during the first quarter of 1990, Nielsen shocked the industry by reporting that almost 2 million households had suddenly stopped watching TV and that viewing by key segments was sharply off as well.

This was a dropoff unprecedented in TV history, and the networks bore the brunt of it. On the other hand, Nielsen had a few customers who were more satisfied than before - a lot of cable stations and the new Fox network were delighted. They had numbers that showed their viewing was steady or growing.

Not so the Big-Three networks. They had to refund from $ 150 million to $ 200 million in "make-goods" - giving advertisers free rides to make up for audience guarantees they hadn't met. The ratings were so low that all three networks adopted a controversial audience-measurement system in attempts to cut their losses.

Instead of setting advertising prices on the basis of current Nielsen ratings alone, as had been the practice for years, the network plan used a complex mathematical model involving eight years of viewing. But advertisers rejected the plan, and the networks eventually abandoned it.

"There's never been a satisfactory explanation for the dip," says Bill Rubens, former research head at NBC and now a consultant to all three networks.

"It just doesn't make sense that households using TV would dip during the cold months and then suddenly go back up again as the weather got warmer."

Nielsen has another answer. "We're not sociologists," says John A. Dimling, Nielsen's executive vice president for ratings. "All we can do is record a drop in TV-watching as it occurs. We spent countless hours and [lots] of dollars to find out what happened, and we concluded that viewing really was down."

Is this what the networks want to hear? Not for a minute. They're under big pressure to boost their ratings, and they've got two choices: improving programs or pressuring Nielsen to make changes. They say they're doing both.

How are they applying that pressure? They formed the Committee on Nationwide TV Audience Measurement (CONTAM, hereafter referred to as "the committee"). And, after spending more than $ 1 million and 18 months on a 600-page report, the committee's mem- bers are none too subtle or diplomatic about the committee's conclusions, either. Take this little blast from its chairman, NBC's Schiavone: "The system is not accurate. We have demonstrated that Nielsen has no apparent commitment to responsible methodological research."

Gulp. The committee's members say that Nielsen's flaws run deep - and it has made a list of the worst of them:

The people meters go against human nature. No one can watch TV that way.

There's no way children press the right buttons.

Button-pushers all suffer from a "fatigue factor." After a few months of obediently pressing the right buttons, they get tired of the whole business and lie down on the job.

Out-of-home crowds (such as viewers at restaurants and bars) aren't counted at all.

Nielsen doesn't take into account the effect of all the new gadgets. VCRs are the big offenders here. Not only is a taped show recorded as a watched show ("Ha!" say the networks) but watching videotapes allows viewers to speed past commercials.

And then there are split screens (which screen is being watched?) and miniature TVs (not recorded at all).

Nielsen's incentives to viewers, a mere few hundred dollars a year, aren't enough to make most people push all those buttons.

It's impossible to get meaningful data from "grazers" - people who constantly flip from program to program.

Dimling, for his part, says Nielsen is moving to improve its operations. He reports Nielsen is working on using former panel members to persuade new families to participate. It is also checking whether those who agree to become Nielsen families are different from those who refuse. The problem, says the committee, is that no one knows. Says Dimling: "It's very difficult to get direct evidence . . . You're trying to get information from people who have already refused to respond."

Nielsen is removing the word "voting" from its instructions - so families understand they're recording their viewing, not voting. The company is also providing material to teach children how to use people meters and is testing an electronic diary to measure out-of-home viewing.
 
UNLIKE the networks with their "High Noon" attitude, six-guns blazing, Nielsen is eerily peaceful toward all the Huns storming its gates. After all, the Huns are its customers - its biggest-paying customers. The Big Three pay about $ 6.5 million each to Nielsen every year. That's about half of what Nielsen makes from its ratings business.

No wonder Nielsen executives are reluctant to talk to the press these days. They can't bash their best customers, can they?

But Dimling does say Nielsen is responding to all of the committee's complaints. "The networks sincerely felt there was something wrong and . . . they needed assurances that the system was working properly," he says diplomatically. "I really believe we've made substantial improvements."

The committee makes Nielsen's cooperation sound like part of the problem. "They were responsive and open to our CONTAM study, that's true," says Schiavone. "But that only made their methodological flaws more apparent."

"Why was it up to us to find these problems?" says the committee's Alan Wurtzel, who is ABC's research chief. "Why didn't Nielsen come up with the flaws in their system and propose solutions? If we hadn't spent a million dollars to identify that something was seriously wrong, would Nielsen have ever done it?"

The networks aren't the only ones grousing. Marshall Cohen, executive vice president of MTV, which also owns the children's channel, Nickelodeon, says Nielsen's methods are biased against programming aimed at young people. "You'll never see a Nielsen meter on a college campus," he says. "Nielsen has decided it isn't going to meter those kinds of living situations. But what are college kids always watching? MTV. We're forced to show our advertisers other kinds of research to prove that our numbers are higher than [our Nielsens]."

As a result of low ratings in the Nielsen surveys, the networks have talked about abandoning children's programs on Saturday mornings, Cohen says. "The big losers would be children . . . "

Since who is watching is critical, everybody complains about errors in age and gender categories. After all, advertisers buy ads based on how old or rich a program's viewers are. If important groups such as 18-to-35-year-olds don't push their people-meter buttons (as many in the TV industry suspect), their favorite programs can't get their fair share of ad revenues.

The networks and some independent researchers say Nielsen's research methods are so sloppy they make the weekly hot-program list questionable. "I wouldn't count on much of a relationship between what Nielsen reports and the true popularity of programs," says Milavsky, the communications-science professor. "The point is, nobody knows for sure."

Most people in the business think the programs Nielsen lists as far ahead of the pack - "60 Minutes," for example - are at least very popular. But that's as far as they'll go. It's the vast middle ground that doesn't get a fair shake, they say. "The TV show that Nielsen ranks as 50 is probably not No. 1," says Milavsky. "But as far as programs that are separated by only a percentage point or so, all bets are off."

Schiavone says: "It's not just a demographic problem. The publicity that occurs when programs like 'Fresh Prince' and 'Uncle Buck' are supposedly running neck and neck is a joke. Nielsen has no idea which program is actually being watched by more Americans."

So where do advertisers stand in all this? Mostly, they've stayed on the sidelines, and that's good ammunition for Nielsen, because advertisers are the ones who fork over their dollars based on Nielsen's numbers. And, if those numbers are wrong, they'd surely be squawking. Wouldn't they?

"One can't help feeling there is at least a little bit of a 'kill-the-messenger' syndrome going on here," says Bob Warrens, senior vice president of media research and resources at J. Walter Thompson. He is also chairman of the American Association of Advertising Agencies.

"I generally believe, and I think the advertising agency community generally believes, that the [people meter] is better than the old diary/household meter system," says Jayne Spittler, vice president for media research at the Leo Burnett agency. "We all sometimes lose sight of that."

But then advertisers, too, are looking out for their own interests. As network viewing falls, they pay less for network commercials. Schiavone is unhappy that ad folks don't speak up. But here's the way he says it, because now he's talking about his customers: "Passivity on the part of the ad community is in part a function of what is at stake for certain players."

Nielsen is clearly sensitive to all the criticism it has received, but its overall strategy appears to be to lie low until it can unveil its new technology: the passive system. This is the new wonder in Nielsen's back rooms, and many of its people believe it will miraculously make Nielsen, broadcasters and advertisers one big happy family again. The passive system will sit on the TV set just like the people meter, but with one big difference. A very big difference. By Nielsen's description, the passive system will actually be able to "see" who is in the room. The new-tech meter uses an infrared image-recognition system that can actually recognize every individual in viewing range. Even if your head is turned away from the set, Nielsen says, the meter will know.

The passive meter is still in the prototype stage, but when it's placed in Nielsen's 4,000 households in 1993 (Nielsen hopes), there will be no more button-pushing. Nielsen families won't have to do anything to record who's watching what.

Dimling says his "image-recognition system" will not only be much more accurate, but will dramatically increase "cooperation rates" (the percentage of people willing to become Nielsen families). Since nobody will have to do anything, goes this thinking, who could object?
 
ACTUALLY, it's the networks that object. They say the expense and reliability of the passive system remains questionable, and that a fear of "Big Brother" invading the home could actually lower cooperation rates. "It's still an open question whether people will allow these things to 'watch' them in their bedroom," agrees Milavsky.

Nielsen's best estimate is that an image-recognition system is at least two years and billions of advertising dollars away. The networks say they can't wait that long because Nielsen's system is costing them money now. Since the introduction of people meters in 1986, the committee says, its audience share has regularly been "underreported," particularly among groups important to advertisers such as children and young adults.

And there's one more thing. Many Nielsen clients believe that more technology is the last thing the audience-measurement business needs. Even people meters bother Schiavone: "[They] were sold on their ability to provide a tremendous amount of data, much of it overnight. But who uses all this data, and why do we need it the next day except as a popularity contest?

"I guarantee you that TV stations and advertisers all over the country have mounds of information lying unopened under someone's desk. Nielsen provides more than 75 demographic categories. No one cares about most of them."

So what would he prefer? Schiavone says the committee would like to see a return to the system of checks and balances that existed before 1986 . Meaning what? Meaning a combination of meters and diaries, and probably telephone surveys as well. "The answer is simplicity itself," says Schiavone.
 
SO IF the networks want less gadgetry, is that what they're going to get? Not a chance, if Nielsen and its competitors have their way. They're moving toward even more high-tech solutions that would provide an even higher pile of information.

For instance, Arbitron - Nielsen's major competitor in local ratings - has staked its future on its "ScanAmerica" system. It's the "Scan" that's crucial here.

"ScanAmerica" would keep people meters, but add an in-home scanner that reads the bar codes of grocery products. Its participants would not only have to press people-meter buttons; they'd have to scan every grocery item they unload in their kitchens. This system is being tested in Denver - and is supposed to go nationwide next year, telling Arbitron's clients not only who is watching, but what viewers are buying.

Arbitron has some major advertisers sold on ScanAmerica's potential to become an invaluable marketing tool. The company says it will be able to tell Campbell's Soup, for example, that " 'L.A. Law' had a rating of 19 in the Denver market and a 41 share, and 49 percent of those watching were heavy soup drinkers. Thirty-nine percent regularly bought Campbell's and 16 percent did most of their shopping at Albertson's."

Then there's Information Resources Inc., with its BehaviorScan, which will allow two different commercials to be sent to adjacent cable households. They will check to see who bought what - in other words, which ad worked better.

Here, too, the networks are nay-sayers. Buying habits and viewing data are two completely separate pieces of the pie, they say, and so ScanAmerica is exactly what they don't need. "Asking people to scan and push buttons will obviously only compound the problem," says Schiavone. "We want to simplify the process."

So the networks have taken their best shot, and Nielsen is still standing. They've asked other research companies for new proposals and come up empty. No matter what AGB, the leading ratings company in Europe, and Arbitron say about their methods being superior, both rely on the same people meters that the networks hate.

After absorbing Scudball after Scudball, Nielsen appears firmly in control. With all their dissatisfaction, network executives admit they'll probably sign a new contract with Nielsen before the fall season begins. (The old one expired last September, and they've been operating month-to-month since then.) And although the contract is expected to include a few specifics about Nielsen's planned improvements, that probably won't make a dent in the intensity of the networks' frustration.

What kind of business is this? As long as Nielsen was serving the self-interest of all its clients, no one complained about its research. Now the networks are trying to shoot holes even in its "new, improved" methodology.

This frontal assault by the networks is bound to take its toll on the credibility of the ratings. And as that begins to happen, no one - not the networks, not the advertisers, not the viewing public - stands to benefit.

Nevertheless, Nielsen still holds a monopoly in the ratings business, and for the foreseeable future will continue to decide what the American public gets to see on TV. That much is certain.

Keeping track of the nation's viewing habits, it seems, looks like a job for Superman. In his absence, Nielsen will have to do.
 
TROUBLED DIARIES
 
NIELSEN rushed people meters into operation in 1986 after its primary European competitor, AGB, began to put them in U.S. homes.

AGB claimed the meters were much more reliable than Nielsen's old diary system. But Nielsen had a system of checks and balances built into those old procedures. One set of families filled out a weekly diary while another set used a metering device. The two samples, combined, produced the ratings.

This system is still used in 25 local markets during "sweeps" periods (four a year), when Nielsen measures local ratings. But the diaries had problems, too. They were usually filled out by the woman of the house, who often "voted" for her favorite programs - whether anybody watched them or not.

The diaries frequently weren't filled in until days later, when the diarist had to "remember" what her family watched. Given human memory and all the possibilities, this was fairy-tale stuff. "I wouldn't want General Foods basing its decisions on my diaries," says a New Yorker who regularly filled one out (for Arbitron) a few years ago.

AGB said people meters would cure these ills, so Nielsen caved in and rushed its own meters into the breach. That move paid off for Nielsen - AGB lost $ 67 million and fled the field.
 


GRAPHIC: Color Photos by Ozier Muhammad- 1) NBC's Nicholas Schiavone, head of a committee on TV ratings, holds a report attacking Nielsen rating 2) Official of the Big three networks appeared together a Manhattan forum on television and radio broadcasting. From left are CBS' David F. Poltrack, senior vice president for planning and research; ABC's Alan Wurtzel, senior vice president and ratings chief, and NBC's Robert J. Niles, vice president, research. 3) Photo- John A. Dimling, Nielsen's executive vice president for ratings, say his firm is moving to improve its operation . 1) Cover Color Illustration by Debra Solomon- Nielsen zapping TV programs from the clouds 2) Color Illustration by Lisa Blackshear- Busy family, lady with remote control



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