NBC strikes deal with Nielsen

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If there was any doubt that Nielsen Media Research would continue to be the
standard-bearer for TV-audience measurement, NBC dispelled it Thursday by signing
a seven-year deal for research and ratings services for all of its distribution
outlets, which is valued at more than $400 million.

That deal far surpassed in value the only other all-inclusive cross-platform
deal between Nielsen and a major media conglomerate -- a seven-year agreement
with Time Warner Inc. struck in 1998 for $150 million.

And the arrangements would appear to be templates for the way Nielsen and big
media will do business in the future -- both Viacom Inc. and The Walt Disney Co.
have had discussions about similar arrangements, although neither company is
said to be close yet.

The NBC deal covers the main broadcast network, the company's 14 owned-and-operated stations, Bravo, CNBC, MSNBC, Telemundo and 13 Telemundo Communications Group Inc. TV stations.

NBC's agreement endorses Nielsen's plan to start rolling digital
"Active/Passive Meters" starting in 2004 and also supports Nielsen's 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" are the technology of choice, at
least in the near term, for TV stations.

Last week however, Alan Wurtzel, president of research and media development
for NBC, stressed that he believes in the long-term potential of the "Portable
People Meter," a technology being jointly explored by Nielsen and Arbitron Inc.

"From our point of view, 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," Wurtzel said.

Nielsen 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.

"I think it was a win-win for both of us," Wurtzel said.

Wurtzel added that two key ingredients made the deal work for NBC,
including the fact that it covers all of the company's distribution platforms. "In
a world where so much of what we're doing now is cross-platforming [as in ad
sales and repurposing], that is very important," he added.

Aside from price, the deal is precedent-setting in another way, Wurtzel said.
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 useable data -- fall below
agreed levels for certain periods of time.

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