NBC, Nielsen Sign $400M Pact2/23/2003 07:00:00 PM Eastern
If there was any doubt that Nielsen Media Research would continue to be the standard-bearer for TV-audience measurement, NBC dispelled it last week by signing a seven-year deal for research and ratings services for all its outlets. That's a deal worth $400 million.
That far surpasses the only other all-inclusive cross-platform deal between Nielsen and a major media conglomerate: a seven-year, $150 million agreement with Time Warner in 1998.
Aside from price, the deal is precedent-setting in another way, according to Alan Wurtzel, NBC president of research and media development. Nielsen has agreed for the first time to financial penalties if certain characteristics of the national sample—such as cooperation rates and percentage of the household base actually providing usable data—fall below agreed-to levels for certain periods.
"It's becoming more and more difficult to accurately measure media," said Wurtzel, "and it really is a matter of making sure the sample is basically in range" and accurately reflects the TV viewing universe.
The arrangement would appear to be a template for the way Nielsen and big media will do business in the future. Both Viacom and Disney have had discussions about similar arrangements, although neither is said to be close to a deal yet.
The NBC deal covers the main broadcast network, the company's 14 owned and operated stations, Bravo, CNBC, MSNBC, Telemundo and 13 Telemundo TV stations.
NBC's agreement endorses Nielsen's plan to start rolling digital active/passive meters starting in 2004 and also supports its decision to double the size of its national ratings-household sample to 10,000.
And, although details still have to be worked out, the agreement also signals NBC's acknowledgement that local people meters is the technology of choice for TV stations, at least in the near term. Last week, however, Wurtzel, stressed that he believes in the long-term potential of the portable people meter, a technology being jointly explored by Nielsen and Arbitron.
"From our point of view," said Wurtzel, "we wanted stability and some assurances about the quality of the measurement, and we also wanted to ensure the ability to forecast what the costs would be going forward."
Nielsen Media Research President Susan Whiting called the deal a "landmark agreement" that "reflects our commitment to deliver the highest-quality [ratings] and that we have invested in the right technology, the right methodology, the right partnerships" going forward.
Wurtzel concurred: "I think it was a win-win for both of us."
Expanding the national sample is fulfilling the request of clients who believe that, as audiences become more fragmented with additional viewing outlets, the sample has to get bigger to maintain accuracy. How long it takes to expand the sample to 10,000 "somewhat depends on the support from other clients" in ongoing discussions, said Whiting. "NBC has signaled their support, and we've got more work to do with other clients, but we can start the process as soon as this year."