Networks Back Nielsen Competitor
NEW YORK (AP) _ The top four television networks have agreed to financially back a rival to Nielsen Media Research, the company that measures viewership, in hopes the competing service will begin operating within two years.
ABC, CBS, NBC and Fox have signed a letter of intent to pay a total of $60 million in startup funds for Statistical Research Inc., a Westfield, N.J., firm. The company says it needs $100 million to begin operating.
Broadcast networks have grumbled that Nielsen’s ratings system is frequently unreliable, a complaint that’s grown louder as Nielsen has documented the steady erosion of their viewership to cable.
Six advertising agencies have also agreed to back SRI, but company spokesman George Hooper could not say Monday how much money they had committed.
``The industry must have continuous improvement in audience measurement in today’s more complex viewing environment,″ said Michael Drexler, chairman of one investor, TN Media. ``This will only happen with competition in the marketplace.″
SRI’s competing system has been in the works since 1988, when television networks made an initial investment in research. It has been producing test ratings in the Philadelphia area since early this year, Hooper said.
Its system differs from Nielsen’s in using an electronic eye and coding system to measure who is viewing and what they’re watching. Nielsen has had some trouble getting families to participate in its survey because it requires the installation of hardware in television sets.
The four major broadcast networks each pay Nielsen more than $10 million a year for its data, upon which advertising rates are based, according to The Wall Street Journal.
A Nielsen spokesman, Jack Loftus, questioned the reliability of SRI’s data and the service’s objectivity, given that it will be bankrolled by the four major networks.
``This system is designed from the get-go to inflate the (ratings) numbers,″ Loftus said.
Hooper noted that with the advertising agencies also backing the company, SRI is not being dominated by one segment of the industry.