I am taking a view on the current PPM battle between Spanish Broadcasting System (SBS) and Arbitron which transpired in the last 72 hours that the broadcasters might not want to hear.
Arbitron filed a Temporary Restraining Order request in NY Supreme Court against SBS for breach an alleged breach of contract and past monies or fees due for SBS’s ratings service contract, (see below to download Memorandum, Temporary Restraining Order Request and other documents filed by Arbitron against SBS).
Adding to this, SBS allegedly has stopped encoding their radio signals. So Arbitron’s PPM decoders cannot pick up the SBS stations and generate radio ratings for the SBS radio stations in the alleged markets and basically rendering the ratings results in these markets as questionable.
In a 2007 contract between SBS and Arbitron, SBS would implement and maintained encoding of their radio stations according to contract. According to Arbitron, SBS shut off the encoders at it stations in Chicago, New York, Los Angeles, Miami and San Francisco on February 3, 2010 without providing notice. SBS engineers confirmed the shutoff based on orders from the SBS corporate offices. Arbitron alleges that this is a tactic that SBS is using to dispute fees owed to Arbitron and that SBS has not paid the fees since July 2009, allegedly owing Arbitron $2.5 million in fees.
Raul Alarcon - CEO of SBS has been known for his cavalier approach to business and his tactics.
Univision Radio has not encoded their signal in several markets, but are not in violations of their contract with Arbitron.
The PPM Coalition made this statement regarding Arbitron approach to SBS, “With regard to the Temporary Restraining Order issued yesterday by the New York State Court, counsel for Spanish Broadcasting System, Inc. noted: Arbitron’s decision to obtain the requested relief by waiting until the end of the day to file ex parte papers which SBS did not have the opportunity to review prior to the hearing is telling. We believe that a full airing of the evidence will lead to a drastically different result.”
Well, welcome to the big leagues. You didn’t think Arbitron plays hardball? Advantage Arbitron, so what!
This might not help the cause of other parties that were working collectively and diligently to help bring a working consensus that could give both the broadcasters and Arbitron a platform to potentially resolve the differences, especially in the light that SBS has exercised pressure on the political front to help their cause against PPM in Washington DC.
The question at hand. Where advertisers also in the dark of the alleged SBS not encoding their radio stations and the impact of future ratings since February 3, 2010?
This is a Big Boys game. Fortunes are at stake on both sides.
The problem here is that there must be a movement forward towards resolving PPM issues from both sides.
Don’t let the advertisers decide who they will side with. The Broadcasters might not like the selection.
To download documents CLICK below:
Order to show Cause CLICK HERE.
Complaint CLICK HERE.
Memorandum CLICK HERE.
Attachments CLICK HERE.
By Gene Bryan -CEO /HispanicAd.com
February 13th, 2010 at 9:18 am
Gene,
A very thoughtful and telling analysis, kudos to you!
Saludos,
Damaso
February 15th, 2010 at 8:35 am
WOW. This is disappointing news to say the least. As someone who has been following this debate since 2007, I was one of the primary PPM analysts at my prior agency. To see Arbitron file their paperwork in the manner that they did is hardly surprising. Their stance from the beginning has been indistinguishable from that of a steamroller.
Additionally, while the people I’ve worked with at Arbitron over the years have all been great, their responses to the questions I’ve posed time and again have done little to dispel the suspicion that something isn’t kosher with their practices.
That being said, it would seem that a contract is a contract, and SBS will probably have to live up to their end of it, unless they can find a legal “out.” What’s more important, I think, is the looming question of what we think all of this is going to accomplish?
While on one hand, I applaud Univision’s decision to not encode, and SBS’ attempt to follow suit, do any of us really believe that these actions will cause Arbitron to change their processes? I don’t have the inside scoop on how much Univision and SBS contribute to Arbitron’s overall revenue, but I have to imagine it’s somewhere in the high single digits-to low double digits, commensurate with the percentages we see Hispanic ad budgets getting relative to General Market budgets. So, is the loss of 10% revenue going to cripple Arbitron and get them to bend? More to the point, while I think we’ve all been able to identify some of the weaknesses of PPM with regard to Hispanic sampling, the next question is, IF Arbitron made changes to their panel and sampling, how much of a difference do we really expect to see in the numbers?
February 18th, 2010 at 12:38 pm
Jose Cancela said it best in today’s newsletter. Get on with the business of business and stop with the sucker punches! I find it interesting that people like the above poster indicate that ‘everyone knows there are weaknesses in Arbitron’s Hispanic sampling’— yet no one can seem to articulate what they are? Arbitron makes all the information available, if you care to spend the time reading about it. Where is the SRA’s information, SBS’s or Univisions research that proves it? Where is CBS Radio, Clear Channel? They have the reserach muscle, if somethign was “wrong” wouldn’t they point it out? Wouldn’t they have something to loose? It is hard to argue that the PPM sampling process is flawed. Nothing is perfect but it is leaps and bounds above the diary method. LEAPS AND BOUNDS. The diary method is flawed and archaic. I think the Spanish broadcasters are up set that their free ride is over, and now they need to earn their audience with great programming. They want to stay living in the hand over fist revenue years of the early 2000’s. So they will continue with their rhetoric that “something is wrong” without identifying what it is. This agency will continue to use the best research out there… and that is not the diary. Nothing is perfect. Not Nielsen and certainly not Arbitron. We are getting tired of being dragged into this mess. Don’t hurt our businesses and further damage the credibility of Spanish language Radio by not encoding, that makes it hard for us to make the case for Spanish radio. Keep your agenda with arbitron private. Get with the program and leave us out.