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Arbitron/Longport legal battle

You'll recall that Arbitron recently stopped publishing any ratings for stations that don't subscribe to its services. One reason given is that some stations have been using the freely available data to help sell advertising. Apparently, people using Arbitron's products without paying for them has been a problem.

This report of a "sting" is interesting and we probably are likely to see more non-subscribing stations get stung.

It is up to the courts to decide if anything illegal was done here, but what the allegations indicate is that the "stinger" approached Longport about buying spots, and the station provided him with a copy of its Arbitron ratings to help make the spot sales, but Longport hadn't paid Arbitron for the use of those ratings, which are copyright.

McGavren Guild appears to be a national sales rep firm that sells spots on hundreds of stations, many of which are likely to be Arbitron subscribers. McGavren is also a subscriber and has access to the Arbitron database. When dealing with its client stations that are Arbitron subscribers too McGavren can certainly exchange and make available any breakdowns or analysis of Arbitron data, and the stations can use those printouts to pitch potential advertising clients. In diary markets, like AC, any station listed by a listener is included in the ratings and in the Arbitron database, but the stations have to pay to use them.

The allegations in this case would indicate that the radio rep firm used Numath software to print out Arbitron ratings to help the station pitch the potenial ad client, aka Stinger. Numath software is used to calculate audience "reach and frequency" when placing ads on a station. It works with numbers from the Arbitron database. So, the stinger allegedly was able to provide hard evidence that the station was using copyright Arbitron data that it didn't pay for, or have a right to use.

The fact that the rep firm is in "settlement discussions" with Arbitron might be taken as an indication that it sees the evidence as pretty strong. On the other hand, Longport apparently doesn't.

Cases like this are often most valuable in discouraging others from using copyright material, and the more attention it gets the move valuable it becomes. A rep firm whose business depends on the use of Arbitron ratings, and has many client stations which are subscribers probably wants to get this over with and out-of-the-way for PR purposes, ASAP.
 
Unless Arbitron has some evidence that Longport *knew* McGavren was using Arbitron data to sell Longport time, I would think Longport would have a case here.
 
Unless Arbitron has some evidence that Longport *knew* McGavren was using Arbitron data to sell Longport time, I would think Longport would have a case here.

I couldn't agree more. Unfortunately, the All Access story didn't make clear who actually sent or handed the ratings info to the potential advertising client, aka stinger.

But, if the stinger only approached and had contact with the rep firm, it would be hard to blame Longport. It is also possible the rep firm made an honest mistake if it provided the rating info as a matter of routine, forgetting that Longport isn't an Arbitron subscriber. Probably most of its client stations are.

If all contact was between the rep and the stinger, something tells me there is a good chance of an "undisclosed" settlement, with charges against Longport dismissed. The whole dispute will quietly disappear, and we may have already heard the last "official" news of it.
 
Do you really think Arbitron would risk losing a court case to a radio station that would potentially open up a loop-hole and paying attorney's fees and compensatory damages if they didn't have evidence to support that the station had contact and/or knowledge?
 
Do you really think Arbitron would risk losing a court case to a radio station that would potentially open up a loop-hole and paying attorney's fees and compensatory damages if they didn't have evidence to support that the station had contact and/or knowledge?

At this stage, Yes. I'm not a lawyer and we can only guess what is going on based on that one short article, but it seems that Arbitron has solid evidence and a witness to support its charges against the rep firm. Since Longport is not a subscriber, it had to be the rep firm that pulled the data, and the rep firm is already in settlement talks, which tells you something.

Given that the rep was an agent for and selling on behalf of the radio station, Arbitron certainly has probable cause to file the charges against the station owner too. The charges aren't frivolous, and the way that the system is supposed to work is that the parties will go into the "discovery phase" where all the evidence and sworn testimony is collected. It is during that phase that Longport has the opportunity to prove its prior ignorance of the rep firm providing a potential ad client with data it had no right to use. And if enough evidence to support that comes out in discovery, for example the rep firm testifying that Longport wasn't involved and didn't know, and the stinger testifies he never had any direct contact with Longport and only dealt with the rep, then Longport can file for dismissal of the charges.

Arbitron is not risking losing a case to a radio station, if that radio station can be proved to have not been involved, and not done anything wrong. It doesn't look like its going to lose its case against the rep firm. And it wouldn't open any loopholes, since they likely had probable cause to suspect that Longport was involved, the lawsuit wasn't frivolous, and they therefore wouldn't be responsible for attorney's fees and compensatory damages.

There seems to be solid evidence that Arbitron was damaged, and in discovery they will seek to find out if it was damaged only by the rep firm, or if Longport was knowingly involved. It looks like somebody is going to pay Arbitron something here, and that means Arbitron will win the case. How much, and from who, is what the court, or a settlement, will determine.
 
Yes, and Longport is counter suing for damages and fees, so there is a risk. Also, prior to suing both the rep firm and Longport, Arbitron's attorney's could only guess that the rep firm would settle (I'm sure they weren't hoping Longport would counter sue). So, they were at risk with both parties either counter suing or losing the suits.
 
With Arbitron charging around $50K PER STATION PER YEAR, small and medium size groups can't make enough in national revenue, especially niche formats, to justify the expense in this market. It gives the 2 large groups a tremendous advantage in the selling game. The mom and pops can't even play in the same ballpark. And frankly, the samples and extrapolation stink! I've personally seen diaries at Arbitron headquarters in Columbia where entire families books were filled out in the same teenage girl's handwriting (complete with little hearts dotting the "i's"). 1200 poorly placed books for almost 300,000 people. Does WAYV really lose 1/3rd of it's listeners in less than a year, and then get them back next book? I doubt it.

Most likely it was McGavern-Guild's screw up, but the lawyers will earn some money and Arbitron will get some money. Like they need more of it. I just wish that the ratings game wasn't a monopoly. Oh, to have Birch back or maybe Neilsen or some other ratings company to provide competition to Arbitron.
 
RE-20 said:
With Arbitron charging around $50K PER STATION PER YEAR, small and medium size groups can't make enough in national revenue, especially niche formats, to justify the expense in this market. It gives the 2 large groups a tremendous advantage in the selling game. The mom and pops can't even play in the same ballpark. And frankly, the samples and extrapolation stink! I've personally seen diaries at Arbitron headquarters in Columbia where entire families books were filled out in the same teenage girl's handwriting (complete with little hearts dotting the "i's"). 1200 poorly placed books for almost 300,000 people. Does WAYV really lose 1/3rd of it's listeners in less than a year, and then get them back next book? I doubt it.

Most likely it was McGavern-Guild's screw up, but the lawyers will earn some money and Arbitron will get some money. Like they need more of it. I just wish that the ratings game wasn't a monopoly. Oh, to have Birch back or maybe Neilsen or some other ratings company to provide competition to Arbitron.

If you want to see a bigger joke take a look at M-Score, which uses PPM. Love hearing people talk about it and then looking at how few people of a sample they get is a joke.
 
In thinking about this further, it seems likely what happened is that Arbitron data wasn't used to say X-station beats Y-station in ratings, but when the rep firm did the "reach and frequency" suggestion for the potential ad client it used software that needs Arbitron data to work. You can't calculate the percentage of the population your ads will "reach" if you don't have ratings numbers to work with.

Arbitron is probably trying to send a message to all these rep firms, that represent non-subscribing stations, that they can't make use of Arbitron data to benefit non-subscribers in any way. I'm not saying this is true in this case, but can't you hear a radio station owner saying "we don't subscribe to Arbitron data, but our rep firm does, and they can provide you with the information you want about our station's ratings" ?

Unfortunately, the national advertisers want to buy their spots "by the numbers" and if you don't have those "official numbers" you can't play. Having a rep firm that pays one fee and then uses the numbers to benefit dozens of its non-subscribing client stations damages Arbitron's business model. It costs money to collect all that data and those who benefit from its use should pay the fair cost.

If station's don't do enough national business to justify buying the ratings data, than they just have to try and sell the national advertisers without any use of those copyrighted numbers.

That's probably the point Arbitron is trying to make with these lawsuits, and if stations and reps want to avoid being sued they have to remember to play by the rules. Whatever monetary damages they "win" are probably far less important than protecting the value of their copyrighted data and their business model overall. If they settle, to avoid running up large legal bills, the amount of damages paid will be kept secret, but the legal point, and warnings to rep firms and non-subscribing stations, will have been made.
 
TimeIsTight you seem to keep wanting to give a pass to Longport. Don't put it past the savvy owners/managers there to have had their hand in this. I'm not saying they did anything, I have no knowledge, nor opinion, however the people who bought the station were not radio people, but businessmen, and the president knows all about the ins and outs of the radio industry. Point is they didn't get there by luck, and that may include bending a few rules. I know how this sounds, and I don't want to insinuate anything about the company or the people, but they have been named in a lawsuit, so to totally dismiss that they had anything to do with the complaint is either a biased opinion or an uninformed one.

As for the rest of what you said, I believe you are correct, that's exactly what Arbitron wants to do. Also, remember, not allowing a company access is also a punishment/deterrent for when they do something fraudulent. As bad as the sampling is, how could Arbitron function as a business if anyone could get the ratings, regardless of paying for them or not, and, furthermore if a station/group did something worthy of losing book privileges for a period of time they were able to get the numbers anyway?

I know Arbitron charges a lot of money, but this is business. If radio stations stopped paying music licensing fees but decided to play the music anyway, wouldn't they be up for damages?
 
TimeIsTight you seem to keep wanting to give a pass to Longport.

No, it's just presumed innocence until proven guilty. On the other hand, the rep firm's willingness to try and "settle" even before the facts are "discovered" by the court kinda speaks for itself.

Just being "named" in a lawsuit really means nothing, the person who brought the suit has to "prove" the charges in the court of law, and until that happens no judgement can really be made.
 
All of this Sherlock Holmes stuff in regard to Longport really amuses me in light of the simple fact that you cannot rationally or competitively conduct local, regional or national business without some knowledge or complete detail of your Arbitron ratings. You need to know your standing relative to the competition in order to set rates and present competitively, otherwise everything you put out is a wild guess and wild guesses mostly fail. So, what do you do if you don't want to lay out the money and play straight ? By hook or by crook you get the data you need as each case arises and hope nobody is the wiser for it. I suspect everybody in the food chain participated along the way, hoping the lid would stay on the pot and life would go on "business as usual". But ultimately, isn't it just so much easier and more profitable to play fair and square, pay people for the services they provide, and do the things necessary to make the business better and rock-solid long term. A group already so badly tainted just doesn't need more of this stuff.
 
TimeIsTight - you are correct, just being named doesn't mean anything, however a company such as Arbitron would only sue an entity to protect it's brand and right to earn. They may want to teach a lesson to other stations, they may be casting a large net, but it's clearly not a frivolous suit in that the other named party is running to the settlement table. My only issue with you is that in every post you point out that Longport likely didn't do anything and that it must be the rep firm without Longport's knowledge. You also overlook the fact that the firm might want to settle because it's less time consuming than fighting and will cost less than countless attorney fee hours. Many settlements come out with no admission of guilt as a condition of the settlement. The rep firm you seem to think is solely responsible may just be cutting it's losses since Arbitron has a lot of money and resources and the firm wants to simply continue to go on with its business. In other words, Mr. Holmes, you've jumped to two conclusions with no knowledge of the case other than reading what's been reported. That was my point. Both companies may be at fault, both might be innocent, I don't know. I do know that Arbitron wouldn't waste time, money and resources if they didn't think they had a case, and they wouldn't pick a Podunk market station group to set an example to the rest of the country.

andsoitgoes - I agree with most of what you said, however price setting in small markets (probably any markets) has always been a guessing game. Word on the street is that Equity (WAYV, The Touch, WZXL, etc.) charges high ad rates while Longport gives stuff away at a very low rate.
 
My only issue with you is that in every post you point out that Longport likely didn't do anything and that it must be the rep firm without Longport's knowledge.

While it will be up to the courts to ultimately decide, we don't know Longport's direct involvement, but we do know that only the rep firm had access to the copyrighted material, and if copyrighted material was passed to the stinger, it more likely came through the rep firm. Longport couldn't hand over anything it didn't directly have access to, and if Longport did pass it over, it likely got the data from its rep firm. That's unless the data came from an unnamed third party. The rep firm almost had to be involved, Longport didn't.

You also overlook the fact that the firm might want to settle because it's less time consuming than fighting and will cost less than countless attorney fee hours.

No, any settlement talks would certainly involve the attorneys with the meter running. Those negotiations could cost more than taking the case to court. In the absence of damning evidence, one would expect the same reaction and fighting spirit from the rep firm, as we have seen from Longport, which filed an indignant counter suit.

You have to remember this is a very simple case, there is one piece of evidence and a witness. In the discovery phase, the defendant's lawyers will depose the "stinger" who will testify under oath that he was given the copyright material by either the rep firm, or Longport or both. A representative of Arbitron will probably be deposed and asked to identify the material as being covered by a copyright belonging to Arbitron. That's it for that side, a page or two and a couple of hours of lawyer time.

Arbitron's lawyers will depose representatives from both the rep firm and Longport under oath and ask each individually if they passed this copyrighted material to the "stinger." And if they did, they will be asked to explain where they got it. That will take less than an hour too. And that will all fit on a couple of pages.

At that point, it will probably be obvious if a copyright was violated and who did it, if it was. All that is left to argue about is damages, and there are probably plenty of precedent cases. But damages will be determined by the court, so there won't be a lot of back and forth negotiations between the lawyers like there would be in settlement negotiations. Each side will say something and the court will decide on its own.

you've jumped to two conclusions with no knowledge of the case other than reading what's been reported. That was my point. Both companies may be at fault, both might be innocent, I don't know. I do know that Arbitron wouldn't waste time, money and resources if they didn't think they had a case, and they wouldn't pick a Podunk market station group to set an example to the rest of the country.

Arbitron will probably want to set an example any time the opportunity presents itself, especially when it has direct evidence and a witness. In the end it may win money, not spend it, and get its point across. A station group in Atlantic City may seem Podunk but the town has name recognition, and the real target of any point making may be rep firms, if Arbitron suspects that what is alleged is common practice by similar ad reps.

In this case the rush to settle by the rep firm may be an indication of the strength of the evidence against it, or it may be an attempt to get this over with ASAP, and keep the rep firm's good name by settling without admitting guilt. In big and complicated cases settlements are often reached to avoid massive legal bills, this isn't a big and complicated case.

It should go without saying that we are only "speculating" here and as I said in my first post
"It is up to the courts to decide if anything illegal was done here."

For the record, I don't know anything more about Longport than that they own radio stations in the Atlantic City market, and I never heard of the rep firm outside of this story. I have worked for Arbitron clients over they years and used their products, but have no particular affinity for that organization either. So, I think I am about as unbiased, and otherwise disinterested an outside observer as I can be, and just posted my own interpretation of what the case appeared to be. I really don't have any favourites here.

Both companies may be at fault, both might be innocent, I don't know.

And I certainly don't know either, but I will be interested in hearing what the court decides, if it decides.

If there is a settlement, without admission of wrongdoing, all other details will be secret. But, you can be sure Arbitron will be walking away with all its legal expenses covered, extra money in its pocket, and its points made.
 
If this is solely a legal conversation, Arbitron, McGavren or Longport may prevail. If this is an ethical conversation, then McGavren and Longport should definitely be evaluated for practicing unethical behavior. A significant amount of local business is transacted upon the basis of Arbitron data and the majority of regional and national business is transacted upon the basis of Arbitron data. Many local car dealers, casinos and beverage companies utilize the data. Regional hospitals, insurers and others utilize the data. And, national accounts in every category utilize the data. Local and regional advertiser negotiate their schedules and rates at the station level. National advertisers negotiate thru the rep firm. Radio negotiations at this level are metrics based. This is not the world of Priceline where the media buyer calls and the station and says name your price. Nobody does that. Nobody has the time for that. So, it is inconceiveable that both McGavern and Longport did not access and use Arbiton data to conduct business, forgetting the directionality. How many Arbitron biased clients are presently on the staions. Maybe someone should poll them and inquire as to how they negotiated their buys? As for Longport, the question is where did they get the data. There are any number of possibilites: McGavren, friends at other radio stations, clients who pay for the service, so tracking the indiscretion back to the source or a single source could prove difficult. Maybe the people who should be the most upset are the ones who paid for the data and had it handed off to another guy who used it and benefitted from it free of charge.
 
From someone who has seen all the ratings: Dear Longport, why would you even use those ratings? lol!
 
explorer13 said:
From someone who has seen all the ratings: Dear Longport, why would you even use those ratings? lol!
HA!

TimeIsTight - again, you're assuming. How do you know there's only one piece of evidence? Sting operations tend to happen over time with multiple infractions documented. Or, perhaps the "stinger" received multiple pieces of information, all with Arbitron numbers on them.

And settlements are attractive BECAUSE they typically cost less than the risk of losing the case and the time involved. Arbitron would listen to a settlement request because it would make the case get done, damages get paid, example set, move on. McGavern would request a settlement because they are either guilty and want to save the time and money of a trial, or they figure, even if they aren't guilty, they might not win (risk), or it's not worth the time and money spent to go to trial to be proven innocent. Thus, settle.

And my point wasn't about AC being Podunk or not, and you give the market way too much credit. My point was that Arbitron was not going to risk time, money, resources and the possibility of setting a bad precedent if the lost on a station group from AC if it didn't have knock down, drag out evidence to support the lawsuit.
 
How do you know there's only one piece of evidence? Sting operations tend to happen over time with multiple infractions documented. Or, perhaps the "stinger" received multiple pieces of information, all with Arbitron numbers on them.

OK, so there may have been more than one page, to get very technical perhaps I should have said "one set of evidence." Multiple evidence just makes copyright infringement that much easier to prove.

My assumption was based on this quote from the story: "ARBITRON's claim says he was given material "which contained copyrighted ARBITRON audience estimates for the LONGPORT RADIO stations from the SPRING 2011 ARBITRON reports using STRATA's NUMATH software."

That says it all. And since it was a sting, it's probably safe to assume that the stinger requested data printouts, and possibly a cover letter, that included company logo letter heads, specific signatures, and any other rep firm or station logo information printed or signed on the proposal that would make the case a slam dunk.

And settlements are attractive BECAUSE they typically cost less than the risk of losing the case and the time involved.

You're right, settlements do typically cost less, but sometimes defendants wind up settling for more than losing a lawsuit would cost them, if they have been caught "Red Handed" and want to be able to get out of the situation "without admitting any wrongdoing" and without any of the potentially embarrassing facts being made public in a trial. Then there is also the possibility that a trial could lead to further investigations showing a "pattern of abuse" rather than this one, probably slam dunk, incident.

To sum it up from the outside, it looks like Arbitron's hired "consultant" stinger planned well and got exactly what he needed to easily and instantly prove the case against, at least, one of the defendants. If nothing else, that provided "probable cause" to file charges against the other, with more facts to come out in "discovery."

The fact, that one party immediately asked for settlement talks, while the other filed an indignant counter suit, "probably" indicates which one was caught "Red Handed" and which wasn't.

My point was that Arbitron was not going to risk time, money, resources and the possibility of setting a bad precedent if the lost on a station group from AC if it didn't have knock down, drag out evidence to support the lawsuit.

We both agree. Arbitron suspected a problem, and set up a sting that would provide a likely slam dunk win. What we don't know is whether Arbitron will be satisfied that its point has been made, or if it has greater goals for this that go way past Atlantic City and to many other radio rep situations.

Again, I am "assuming" and "speculating" but chances are Arbitron, by stinger design, has a very solid case, and little risk of losing if it goes to trial. The odds are in its favor far stronger than most people ever encounter in Atlantic City. Going to trial wouldn't be gambling, it would be an "investment grade" effort and expense. If a settlement is reached we will never know how good an investment hiring the "consultant" was.
 
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