Viacom Signs $400M Pact With Nielsen

Series of contracts supports local people meters in top 10 markets

Call it a banner year for Nielsen Media Research. Not only has it lined up the two biggest ratings contracts in its history, but it has also essentially won the battle with broadcasters over the local people meter.

Last week, Viacom and Nielsen agreed in principle to a series of new contracts (varying in length from five to eight years) covering ratings services for the company's broadcast and cable networks, syndication services, and 35 O&O TV stations.

Sources familiar with the terms said the collective value of the pacts is close to $400 million and a little less than the record seven-year $400 million-$500 million estimated value of the corporate ratings contract signed by NBC and Nielsen earlier this year.

At the start of the year, the audience-research firm was stalled in its two-year effort to get broadcasters to embrace local people meters (LPMs) in the top 10 markets. Stations were resisting because of the price and the fear of ratings falloff. Just a couple of broadcasters had signed on for the service, which Nielsen plans to roll out by 2006.

Now three of the Big Four broadcast-net station groups have signed up: ABC, CBS and NBC. Fox is still holding out, but talks with Nielsen are progressing, sources say.

NBC's Nielsen contract set a precedent by getting Nielsen to agree for the first time to pay financial penalties if certain characteristics of the national sample fall below agreed-to levels for certain periods. Those characteristics include cooperation rates and percentage of household base actually providing usable data.

Viacom's contracts are still in the letter-of-intent stage, but David Poltrack, executive vice president, research and planning, for CBS, said the network would get terms "in one form or another" that motivate Nielsen to meet quality standards.

Viacom's TV-station contract commits its 15 stations in the top 10 markets to LPM service as Nielsen rolls it out in those markets. Its WBZ-TV and WSBK-TV Boston have been without ratings since Nielsen introduced LPMs there 15 months ago. The new deal puts them back in the Nielsen data flow effective immediately.

Los Angeles will be the second market, with installation there set for March, followed by New York in April. LPM service will roll out to Chicago in June and San Francisco in October '04. Most of the other markets will be phased in in 2005. Ninth-ranked Atlanta will be added in 2006, and that will complete the top-10 rollout.

Viacom's network contracts support expansion of Nielsen's national people-meter sample from 5,000 to 10,000 homes starting in 2004. Nielsen and its clients believe that the larger sample is necessary to accurately measure viewing in an increasingly fragmented TV-viewing universe.

Viacom has also committed to digitally encoding all programs so that they can be identified by Nielsen's new active/passive meter, also set to begin rollout next year.

NBC's deal also supports the sample expansion and digital ID program codes.

Commenting on the new agreements, Nielsen Media Research President Susan Whiting said they "build on a strong foundation between Nielsen and the Viacom television operations and demonstrate our commitment to constantly improve and innovate our business in order to ensure that TV remains the best measured of all advertising media."