The effect of the Cumulus/Nielsen legal battle on ratings discussions

[K.M. Richards]

I think it makes sense for everyone here to be reminded that while Cumulus and Nielsen sue and countersue, the former's stations will not appear in the ratings from the latter.

We should all take that into account when trying to discuss station rankings in those markets where this dispute brings that inaccuracy into play; the rankings will be off at any point on the list of stations where a Cumulus facility would normally appear.

I know ... this takes some of the fun out of it, and will give a lot of us a headache trying to figure out where the real cutoff point is for top 10 or top 20. Blame the lawyers if you need to blame someone.

 

[radiorobert]

I wondered if this would mean stations still on Neilsen would appear to potentially get a greater market share than they otherwise would.

 

[Huff]

I wondered if this would mean stations still on Neilsen would appear to potentially get a greater market share than they otherwise would.

No. The Cumulus stations are still being rated and reported. Subscribers can still see the data. It is the public release of data which will not show Cumulus stations.

 

[K.M. Richards]

To add to @Huff's response, all stations are rated by Nielsen, even those who choose not to subscribe. This is because the ratings need to be a reflection of the entire market.

If Nielsen were to adjust the numbers as @radiorobert suggests, they would no longer be seen as a reliable indicator of listening share across all stations in the market, and thus worthless to the advertising agencies who are the real customers for that information.

I think it is very easy around here for people to think these numbers are somehow for the benefit of the listeners to see how their favorite stations are ranked. Anyone who has that mindset needs to lose it.

Radio is a business. To be more specific, radio is an advertising business. I keep that in mind every day, because any programmer who thinks that he or she is in the entertainment business is performing a disservice to his employer (be that direct or as a consultant) ... and will likely fail at delivering a saleable audience as a result.

 

[Don CT]

Can other companies do ratings or does Nielsen hold a monopoly.

 

[K.M. Richards]

Can other companies do ratings or does Nielsen hold a monopoly.

There is another ratings company (Eastlan) which operates in a handful -- compared to Nielsen -- of markets, but they do not compete with Nielsen; rather, they are in markets which Nielsen had abandoned.

The markets where they operate are listed here:

Eastlan Ratings

radioinsight.com

But it doesn't matter in this context, because the ad agencies are not going to accept Eastlan numbers for any market that Nielsen rates. So the question is academic.

 

[Don CT]

There is another ratings company (Eastlan) which operates in a handful of markets. but they do not compete with Nielsen; rather, they are in markets which Nielsen had abandoned.

But it doesn't matter in this context, because the ad agencies are not going to accept Eastlan numbers for any market that Nielsen rates. So the question is academic.

So Nielsen is a monopoly. Nobody can compete with them.

 

[K.M. Richards]

So Nielsen is a monopoly. Nobody can compete with them.

And that is part of the basis for the Cumulus lawsuit.

But it is not as simple as your statement. Anyone can "compete" with them. Decades ago, we had Arbitron competing with Pulse and Hooper (among others). The monopoly occurs not from a lack of competition but the fact that the ad agencies want to be able to get as much of the ratings data as possible from a single source.

I'll say it again, in all caps and boldface this time in hopes that it will sink in and prevent further such questions or statements: RADIO IS IN THE ADVERTISING BUSINESS. RATINGS EXIST FOR THE BENEFIT OF THE ADVERTISING AGENCIES. Nothing else matters, and any comments or questions that presume otherwise are not worthy of discussion in this context.

 

[KilowattKat]

If Cumulus is unable to show advertisers their numbers, then how do they effectively sell advertising? Isn't this having an effect on the company's bottom line?

Another question, how does the bankruptcy and turning the company over to their creditors affect the ongoing litigation with Nielsen?

 

[TheBigA]

So Nielsen is a monopoly. Nobody can compete with them.

The issue really isn't whether or not they're a monopoly, but how they use that monopoly

If Cumulus is unable to show advertisers their numbers, then how do they effectively sell advertising? Isn't this having an effect on the company's bottom line?

Yes and for that reason, Cumulus has sought to expedite the hearing process

Appeals Court Agrees To Fast-Track Review In Nielsen-Cumulus Case.

The Second Circuit will fast-track the appeal in the Cumulus-Nielsen ratings fight, granting an expedited briefing schedule and pledging to hear the case over an injunction of the policy linking

www.insideradio.com

Another question, how does the bankruptcy and turning the company over to their creditors affect the ongoing litigation with Nielsen?

It hasn't come up in the court filings yet.

 

[K.M. Richards]

If Cumulus is unable to show advertisers their numbers, then how do they effectively sell advertising? Isn't this having an effect on the company's bottom line?

Kat, that is the proverbial crux of the situation. Nielsen wants to exclude any markets from the national advertising reports in which Cumulus owns stations but does not choose to subscribe (and there are a few markets in which that is the case) even to the exclusion of ratings for Westwood One programs not carried on Cumulus stations in those markets.

Cumulus' argument is that said policy is leveraging a natural monopoly by Nielsen to coerce them to purchase ratings in markets where they do not want to do so. A good example is here in L.A., where Cumulus is down to a single station (KABC) which is almost entirely WWOne programming, so they have no need for the local ratings. But if they don't subscribe, the ratings for the network programs running on other stations in the market are excluded from the national totals.

And I believe they are correct.

Another question, how does the bankruptcy and turning the company over to their creditors affect the ongoing litigation with Nielsen?

It doesn't, really. The lawsuits continue until and unless either someone says "pull the plug" or a settlement is reached. I cannot see the creditors wanting to drop this matter, as it affects the long-term revenue prospects for the company.

 

[secondchoice]

If Cumulus is unable to show advertisers their numbers, then how do they effectively sell advertising? Isn't this having an effect on the company's bottom line?

Sorta , as Huff stated the ad agencies can still subscribe. They usually have an amount they will budget your station before they contact you. Sometimes the agency will want you to go "off card" if a human calls with the order. Depending on the size of the market, local sales can be more important especially in sub 100 markets.

 

[K.M. Richards]

Depending on the size of the market, local sales can be more important especially in sub 100 markets.

Even in some of the markets higher than #100. The Albuquerque stations that I consult and program are 100% local advertising, but we don't use ratings to sell to local businesses.

 

[umfan]

Yes and for that reason, Cumulus has sought to expedite the hearing process

Bankruptcy Filing Puts Cumulus Antitrust Lawsuit Against Nielsen On Hold.

The antitrust lawsuit between Cumulus Media and Nielsen has been paused after Cumulus filed for Chapter 11 bankruptcy. A federal judge ordered an automatic stay of the case under bankruptcy

www.insideradio.com

Except, the hearing process and legal action related to this is stayed as a result of the Cumulus bankruptcy filing.

 

[vchimpanzee]

There is another ratings company (Eastlan) which operates in a handful -- compared to Nielsen -- of markets, but they do not compete with Nielsen; rather, they are in markets which Nielsen had abandoned.

The markets where they operate are listed here:

Eastlan Ratings

radioinsight.com

But it doesn't matter in this context, because the ad agencies are not going to accept Eastlan numbers for any market that Nielsen rates. So the question is academic.

I got confused when I saw these for the first time. These numbers include a lot of stations from outside the market.

The site I go to has links for them and I have to be careful if I actually want to compare to what Nielsen has done in the past.

 

[K.M. Richards]

I got confused when I saw these for the first time. These numbers include a lot of stations from outside the market.

That's because Eastlan has a methodology closer to the old Arbitron diary method. To stations and agencies, knowing what out-of-market listening is occurring can be very useful in tweaking one's own programming to be more attractive to those listeners.

The site I go to has links for them and I have to be careful if I actually want to compare to what Nielsen has done in the past.

I shouldn't have to say this, but because of that difference in methodology, you're comparing apples and oranges.

 

[TheBigA]

Dr. Ed Cohen posits a question that would end the legal issue

Is It Time for Cumulus Media to Sell Westwood One and Walk Away?

If a buyer could be found that doesn't own local stations, the problem goes away.

barrettmedia.com

The problem is who would buy it? Perhaps a better suggestion would be to spin it off.

 

[umfan]

Dr. Ed Cohen posits a question that would end the legal issue

Is It Time for Cumulus Media to Sell Westwood One and Walk Away?

If a buyer could be found that doesn't own local stations, the problem goes away.

barrettmedia.com

The problem is who would buy it? Perhaps a better suggestion would be to spin it off.

It makes no sense to sell it for now and, once the bankruptcy is concluded, they are likely to prevail over Nielsen enough to meet their needs and, as you noted, there is unlikely to be a credible interested purchaser. Byron Allen might express interest, but he fails the credible test in this regard.