With conflict resolved, it's ratings as usual

August 19, 2004

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Ratings mean everything in the radio industry. That point was proved yet again on Tuesday evening, when Infinity Broadcasting Corp. announced that it had once more signed up with Arbitron, ending a standoff between the broadcasting giant (a division of Viacom) and the ratings service. The impasse had lasted almost two months and had threatened to shake up the media industry.

The announcement of a new, multiyear contract ended a conflict that had become public on June 24, when Infinity announced that it had elected not to renew with Arbitron. By doing so, Infinity (which owns 185 stations nationally, including Boston's WBZ-AM, 1030; WBCN-FM, 104.1; WBMX-FM, 98.5; WZLX-FM, 100.7; and WODS-FM, 103.3) was losing the right to use information from the service's quarterly ratings reports.

Because Arbitron measures an entire market, Infinity listeners had been counted despite the dispute -- but stations without contracts are not legally allowed to make use of Arbitron's statistics or ranking system. And the company's reports include not only the number of listeners but also who these listeners are by age and gender, and when exactly they tune in (all in quarter-hour segments).

This information serves as the basis for advertising rates, thus influencing everything from staff salaries to major programming decisions. The new contract, according to a statement released by an Infinity spokeswoman, Karen Mateo, will allow Infinity stations to make retroactive use of the spring ratings book.

The standoff seems to have been about money rather than the Personal People Meter, a passive electronic means of measuring listeners' habits that has caused concern among broadcasters.

Arbitron is preparing to test the meter as a measuring system in Houston, but industry consultants dismiss this experimental tool as a major factor in these talks.

"That's still far out," says Robert Unmacht, a media consultant based in Nashville. "This is about dollars."

Indeed, in the June 24 statement, the Infinity president and CEO, Joel Hollander, cited an inability "to reach a mutually satisfactory financial arrangement."

Both sides stood to lose without an agreement. Infinity makes up about 9 percent of Arbitron's business, providing $25 million a year to the New York ratings service, said Alissa Goldwasser, a research analyst at Chicago's William Blair & Company, a brokerage firm that specializes in media and media services. That makes it Arbitron's second-largest client, behind Clear Channel (which owns more than 1,200 stations nationally).

In addition, the conflict was setting the stage for a bigger one: "A large chunk" of Clear Channel's contracts come up for renegotiation at the end of this year, according to Goldwasser.

The company, based in San Antonio, had publicly supported Infinity's initial decision to leave Arbitron, leaving open the possibility that they were preparing for "a very hard-nosed approach" to their own negotiations, Goldwasser says.

But Infinity is a publicly held company, and without Arbitron's hard data it may have been difficult for its stations to sell ads. "Infinity was no doubt reminded that the ad-buying world is still based on Arbitron ratings," says Tom Taylor, editor of Inside Radio. Reuters had reported that Arbitron's parent company, Viacom, had softened its prediction for radio revenue in its next quarter.

There is still the possibility of change: Infinity is continuing its contract with Media Audit, which it had announced in June. This Houston firm does "softer," more qualitative surveys of listeners, not the kind of hard listener numbers that Arbitron provides. This could prove to be the future in the ratings game, "but for now Arbitron is the game and the standard," Taylor says.

With Tuesday's agreement, Infinity and Arbitron seem to have accepted their mutual dependence. "There was probably some subtle blinking on both sides," Taylor says. "They both need each other. You're watching symbiosis in action."

Spinning the dial

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