Marketing

Nielsen Faces Antitrust Suit

6/16/2005 6:31 AM Eastern

Another opponent is taking on TV-ratings titan Nielsen Media Research.

A new TV-ratings company that gathers viewership data from set-tops and its sister company filed an antitrust suit against Nielsen Media Research Thursday, charging that the veteran ratings provider’s “monopoly” has resulted in a distorted view of what millions of Americans are watching.

Bradenton, Fla.-based media-research company erinMedia Inc. and ReacTV LLC, an interactive-gaming network, have sued Nielsen in U.S. District Court in St. Petersburg, Fla., seeking to void Nielsen’s staggered long-term contracts with TV networks and other customers.

“[The suit] was the most immediate way of implementing change in this industry,” erinMedia chairman and CEO and ReacTV founder and CEO Frank Maggio said. “It sends a clear message to others that have failed in the past, and others that have superior technology to Nielsen, that with some courage, you can at least stop them from deploying monopolistic practices.”

erinMedia is claiming that the new interactive set-top technologies that it uses supersede Nielsen’s “outmoded” sampling methods and allow for each viewer to be counted.

“TV networks, advertisers and the American public are all poorly served by Nielsen’s antiquated methods,” Maggio said.

Maggio, a Florida real estate developer, argued that viewership data can be collected from the 25 million U.S. households that have advanced set-tops.

“Until we take advantage of universal data capture from digital set-top boxes, minorities and other viewers will continue to be miscounted and many of viewers’ favorite programs will continue to be canceled,” Maggio said in a press release. “That’s not just monopolistic -- it’s anti-democratic.”

Nielsen called the suit a “frivolous complaint” that “is completely unfounded.”

In a prepared statement, Nielsen said, “There is absolutely nothing about our contracts that prevents erinMedia or any other company from offering a ratings service or that precludes our clients from using another service. We are very confident that this meritless lawsuit will fail.”

erinMedia has been talking with ad agencies, programmers and MSOs about its analysis software, which can be used to analyze second-by-second viewing from thousands of advanced set-tops. In fact, the company has conducted trials with a number of cable operators, collecting data from more than 100,000 homes, in a bid to lend support to video-on-demand advertising.

“This technology provides networks and advertisers with an unprecedented understanding of how national and local audiences view television and how audiences break down by demographic group,” the 22-page suit said.

In the suit, Maggio wants Nielsen to be barred from purchasing its competitors.

“They have made overtures to us,” he said, adding that Nielsen acquired AudioAudit, a broadcast-verification technology-services provider, last week.

Maggio also charged that MSOs fear that Nielsen will try to disparage and raise concerns about viewing data coming from set-tops and “try to scare the public into thinking their privacy is going to be invaded.”

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