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LPMs Shock Ratings

Impact felt in station syndication deals 12/19/2004 07:00:00 PM Eastern

Local people meters (LPMs) are wreaking havoc on stations and syndicators. In major markets like Boston, New York and Los Angeles, overall ratings have dropped. And that decline is affecting syndication deals. Stations that renewed shows like Dr. Phil, Entertainment Tonight and Wheel of Fortune may face a situation they didn't anticipate when signing long-term agreements.

“If a station has paid license fees on ratings that are now 75% of what they were and they renewed out for six years based on higher ratings, that's a huge problem,” says one syndication researcher. As a result, stations may take in less ad revenue on the shows in the future, hurting their profit margins. And on some of the more expensive programs, such as The Oprah Winfrey Show, those margins are already slim.

“LPMs are changing the TV currency,” says Dawn Abel, senior vice president of research for Paramount Domestic Television. “Any time you change the methodology, you impact the business.” (LPMs are also used in San Francisco and will arrive in the remaining six of the top 10 markets by May 2006. They have been measuring local audiences only since 2002.)

Another side effect of LPMs: Syndicators expect to stop producing specific shows for sweeps, since stations in the biggest markets are getting ratings information on a minute-by-minute basis. King World's Oprah, for example, tends to have the biggest stars and giveaways during sweeps periods, but that may change. Says Frank Comerford, president and general manager of WNBC New York: “Now we focus on 52 weeks a year, no stunts, no gimmicks.”

While stations expect ratings to settle, they are seeing strange fluctuations. For example, entire genres are down in one market but up in another. The court shows are down 36% among women 18-34 in New York but up 60% in Los Angeles. More precisely, Warner Bros.' Judge Mathis is up 200% in that demo in L.A. but off 20% in New York. Another oddity: Megaman NT, an animated afternoon show, once beat out The Tonight Show With Jay Leno in New York.

“People meters have the capability of being more accurate,” says Lew Leone, VP/GM of WCBS New York. But Michael Carson, GM of NBC affiliate WHDH Boston, isn't convinced: “The only reason I'm a client is because Nielsen is a monopoly.”

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