Nielsen 'People Meters' Draw Fire 

By Amit Asaravala

02:00 AM Apr. 16, 2004 PT

With nearly $60 billion in advertising revenues at stake, measuring television viewership is a task that leaves little room for mistakes. That's why Nielsen Media Research, the firm that has had a monopoly on audience measurement since the 1950s, has often had to defend its measurement techniques to network and advertising executives.

Just this month, the company came under attack from television networks, minority groups and even lawmakers when a test of its electronic "people meters," newly installed in select New York homes, began reporting a sharp decrease in viewership for television shows that feature minorities. Because the current system -- a decades-old technique involving week-long diaries that are mailed to the homes -- had never yielded such a drastic swing, the critics contended that the new technique must somehow be unreliable.

Yet Nielsen argues that reliability is exactly what the company had in mind when it decided to roll out the meters in local markets like New York City.

"This is 24-hour-a-day, seven-day-a-week, electronic measurement," said Anne Elliot, Nielsen's vice president of marketing communications. "It's totally passive. It's installed on every television set, every VCR, every video game set. So we know that when the TV's on, we can identify what's going on."

Nielsen plays a unique, but hugely important, role in the broadcast media business. Advertisers decide where to spend money by figuring out which groups of people are watching which shows. For example, beer companies and carmakers salivate over young men in their 20s and 30s. These advertisers use the Nielsen service to find the shows that attract this group. Likewise, TV programming executives get paid, promoted or fired based in large part on how their shows fare in the Nielsen ratings. The New York company holds tremendous power.

To date, Nielsen has compiled ratings in local markets by asking about 500 so-called Nielsen families in each major city to record what they watched by writing a diary and sending it to the company by mail. In recent months, though, Nielsen has been installing sophisticated electronic set-top boxes that automatically record what people watch -- including what individual members of each family are watching. At night, the people meters connect to a Nielsen office in Florida through a phone line and transfer the day's data, much like a TiVo.

Nielsen plans to install up to 800 of the meters in New York City alone, none of them in households that are currently on the diary system. According to Elliot, the larger number of metered households is required to maintain the same level of statistical relevance as with the 500 diary households.

With the diaries, Nielsen is only able to do local-level metering four times a year. Not only is the system slow, it has resulted in a phenomenon known as sweeps week, a period during which television producers pursue sensationalistic news stories or introduce zany plots or celebrity walk-ons in their shows in hopes of raising their ratings.

Worse yet, with the diary system, viewers have been known to wait until the end of the week to jot down what they watched, making the diary entries less than perfectly accurate -- a point that even Nielsen concedes.

"There may be a tendency in a diary for people to forget to write down what they were watching until a couple days later," said Elliot. "With people meters you don't have to go back and remember what you watched a week ago."

Still, many critics believe that something has gone very wrong with Nielsen's proposal to switch to the all-electronic systems. In February, measurements taken with the diaries varied from those taken with the people meters by as much as 62 percent for shows with predominantly minority casts. Those shows include Eve, The Parkers and One on One.

The drop has riled everyone from network executives to community activists. For black, Hispanic and Asian viewers, switching to the new system could mean less money for programming and advertising directed at them.

"A drop in ratings translates to a drop in advertising, which translates to a drop in programming, which translates to a drop in opportunities for the black community," said Paul Williams, president of 100 Black Men of New York, one of the organizations that has called on Nielsen to review its local people meter technology.

Despite the concerns, few people can pinpoint the exact cause of the problem, if there even is one. For its part, Nielsen said it conducted an internal audit of the local people meters earlier this year and found no problems. The company also said it has been using people meters for its national ratings since 1987 -- more than enough time to work out any bugs.

"Regarding our results from the people meters, we do absolutely stand by them as being accurate," said Elliot.

Even so, Nielsen has decided to delay rolling out its people meters in New York until June to hold discussions about the ratings variances with minority groups and television networks. Whether those discussions will reveal actual flaws in the system or simply help critics to get used to the new ratings is unclear.

But one thing's for certain: Whatever happens, millions of people will be watching.

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