A Big Stick for a Tiny Group

Senate bill would give Media Rating Council veto power over TV ratings

As Fox's fierce fight over the local people meter (LPM)—Nielsen's new system intended to measure TV networks' and stations' audience in local markets more accurately—moves to Congress, a new bill proposes granting enormous power over TV ratings to a group most industry players know almost nothing about: the Media Rating Council (MRC).

This obscure entity would get complete veto power over the measurement of TV audiences, which dictates how advertisers spend $60 billion on TV networks and stations every year.

So what is this organization that would wield such tremendous power? For starters, it has merely three full-time employees. Annual revenue: around $1 million. Not quite the bureaucracy you would expect from a group getting a government mandate.

But despite its small staff and low profile, the Manhattan-based MRC has a 40-year track record of accrediting media-ratings products. The group devotes most of its efforts to Nielsen but also commissions audits of various products from radio-measurement company Arbitron and companies measuring magazine, newspaper and Internet readership.

The MRC currently has 94 members, largely research executives from broadcast and cable networks, TV and radio stations, publishers, and ad agencies. Each member pays $10,500 a year. Audits are conducted by accounting firm Ernst & Young and are paid for directly by the research companies, which voluntarily submit to them to bolster their credibility with clients.

Not a Political Group

Agency and network research executives say the MRC has not sought out a political role—it is being thrust into one. Executive Director George Ivie isn't thrilled about the prospect of losing his low profile. “This has been a very stressful time,” he says. “I can't say I'm very comfortable.” The MRC is not, he explains, a political organization: “We don't lobby.”

Ivie is sufficiently annoyed with Nielsen that he doesn't fundamentally object to the bill introduced by Sen. Conrad Burns (R-Mont.). Although the bill is not perfect—for example, Ivie wants antitrust protection—he is incensed that Nielsen has rolled out LPMs in some markets without an MRC audit. “I would hate to see legislation and mandatory accreditation,” he says. “But if that's what it takes…”

Some MRC members disagree strongly with the idea of a government mandate. “In the scheme of things, this should be answered by the clientele of Nielsen, not the United States government,” says Kathy Crawford, MRC member and president of local broadcast for media buyer MindShare.

The MRC was born out of a previous congressional fight over Nielsen. TV-history geeks can recount the Harris Committee Hearings orchestrated by then-House Commerce Committee Chairman Oren Harris. The Arkansas Democrat had made a splash over the years with hearings over TV violence (in 1952, no less), payola and the quiz-show scandals. In 1963, he turned to the TV-ratings business, no doubt impelled in part by his partial ownership of a TV station.

To keep Congress from giving the FTC or FCC power over TV-ratings companies, the networks offered to create an industry-oversight group, the Broadcast Rating Council. Despite the rise of cable, the group didn't rechristen itself Media Rating Council until 1997.

The idea of ordering Nielsen to submit to the MRC is being pushed by News Corp.'s Fox stations. Fox executives are worried about the rollout of LPMs. The current system involves handwritten viewer diaries, which are cheap but notoriously flawed. But as Nielsen started rolling out its LPM—a set-top box that monitors every channel-flip by any viewer—Fox and some other broadcasters grew alarmed at the lower viewership recorded for their stations, particularly in black, Hispanic and young demos.

Broadcaster Lobbying Machine

Fox started battling the system by creating its own pet lobbying machine, the Don't Count Us Out Coalition, which poses as a grassroots organization. Lately, though, the company has received support from 16 station owners, including Tribune Co. and Allbritton Communications.

Hence, the bill by Burns. The Senate Commerce Committee member and one-time station owner has teamed up with three other senators to sponsor the Fairness, Accuracy, Inclusivity and Responsiveness in Ratings Act. The key provision: “No person may sell, offer to sell, or otherwise provide … data from a television-ratings measurement system that produces … television-ratings data to be used commercially as currency ratings, unless that system is accredited by the Media Ratings Council.”

The MRC audits aren't financial audits but examinations of the research firm's data and collection methods: Is Nielsen crunching its data properly, or has it unexpectedly changed its methods? The MRC maintains a parallel system, crunching raw data itself to double-check Nielsen.

Often, members debate over tiny—but important—parts of Nielsen's methods. For example, when is a household Hispanic? Is it a question of the dominant language spoken in the home, as Nielsen contends? Or should it be based on where household members were born, as some network executives—most notably from Univision and Telemundo—contend?

“Nobody can accuse that group of not rolling up their sleeves,” says Tim Brooks, a longtime MRC member and Lifetime Entertainment's executive VP of research.

The big question about the Burns bill isn't regarding the MRC. It is why the government needs to be involved in Nielsen ratings at all. Who is being protected here? Consumers—or media giants like Rupert Murdoch?

E-mail comments to jhiggins@reedbusiness.com