Wednesday, October 08, 2008

Obama's Latest Cause

Barack Obama is on a crusade.

But we're not talking about a push for universal health care, or his tax plan to soak the rich. Instead, we refer to the Senator's efforts to ban electronic ratings monitoring.

Brian Maloney at the Radio Equalizer has been covering this issue for more than a year. As he notes, the controversy pits the radio audience measurement firm (Arbitron), subscriber stations and advertisers, against other stations--mostly those with urban or hip-hop formats; their allies in the civil rights establishment and the Democratic Party.

For decades, Arbitron has been searching for a more accurate method to measure the size of radio audiences and their demographic composition. Traditionally, the firm had used "diaries" to record listening patterns. Audience members, selected by Arbitron, were required to record their listening activity in a small book, which was returned to the firm at the end of the ratings period.

However, the "diary method" had serious flaws. Some participants tended to over-report their listening patterns, simply writing in the calls letters (or frequency) of a single station for every day in the survey period. Advertisers--who bought commercial time on the basis on Arbitron reporting--expressed concern that some demographic groups were "over-sampled," while others went under-reported. Broadcasters, particularly those with stations appealing to older audiences, claimed that many of their listeners went uncounted.

To provide more accurate audience measurements, Arbitron developed a device called the Portable People Meter (PPM). About the size of a small cell phone, the PPM is carried by survey participants. It detects inaudible codes embedded in the audio portion of media and entertainment content from broadcasters, content providers and distributors. Periodically, individuals participating in the survey put their PPM in a small docking device that extracts code information, and sends it to Arbitron's computers.

Ratings data compiled under the new system has been tested in New York, Chicago, Los Angeles and other major markets for more than a year. And it seems to confirm the long-held suspicions of broadcasters and advertisers, who believed that audience levels for some formats, particularly news-talk, had been grossly under-reported by the old system. With more accurate PPM technology, a number of talk stations have seen a major ratings spike. As Mr. Maloney reports:

That included a massive 3.6 (spring 2008 under the old system) to 4.8 jump for New York City's conservative WABC in the overall 12 and older demographic. In Los Angeles, KFI moved from a 4.0 to 4.2, while Chicago's WLS surged from 3.0 to 4.5 and Philly's WPHT rocketed from 3.8 to 5.0. And in San Francisco, KGO moved from 5.2 to 6.5.

At WABC, Rush Limbaugh (now ranked fourth among all stations, including music, with a huge 5.3 share), Sean Hannity (third with a 4.8) and Mark Levin (first with a 6.5) have all turned in stellar numbers under PPM.

Meanwhile, ratings for speciality-format stations, including urban and hip-hop, have dropped, meaning a loss of millions of dollars in advertising revenue. In New York, for example, urban-formatted WBLS dropped from #4 to #12 when PPM data unveiled earlier this month. The city's most popular Hispanic station, WCAA, fell from #5 under the diary system, to #20 under PPM.

Executives at those (and other) minority-formatted stations are clearly concerned. WBLS's program director told the New York Daily News last year that the PPM system could "put us out of business."

As you might expect, Democratic politicians and "community activists" are riding to the rescue. New York Attorney General Andrew Cuomo has announced plans for a lawsuit against Arbitron, warning stations and advertisers not to rely on PPM-generated ratings data. Mr. Cuomo claims that the new technology under-represents African-Americans, Hispanics, people who do not speak English and households without "land line" telephones.

Arbitron counters that argument with its own data, showing that the PPM sample is exceeding targets among blacks and Hispanics by more than 15%. The company also notes that the syndicated Steve Harvey Radio Show is tied for first place in morning drive in New York. If the new system was actually under-sampling minorities, the firm contends, Mr. Harvey's program would be much lower in the ratings.

Unfortunately, Mr. Cuomo and his allies never let the facts get in the way of a race-baiting lawsuit. And that brings us to Barack Obama and his role in this affair.

Along with fellow Illinois Senator Dick Durbin, Mr. Obama fired off a letter to Arbitron's President and CEO, urging him to delay the rollout of PPMs in other markets, including Chicago. They claim that a poorly-implemented meter system would "distort the market...harming the important broadcast policy of diversity."

As Mr. Maloney observes, there's more to this letter than sinking ratings at urban and Hispanic stations that are friendly to Democratic pols. Unfortunately for Messrs Obama, Durbin and Cuomo, PPM technology affirms that their biggest broadcast foe--conservative talk radio--is more popular than anyone realized.

Virtually all of the talk stations that saw their ratings soar under the new system carry Rush Limbaugh and/or Sean Hannity. In fact, PPM ratings have added hundreds of thousands of additional listeners for both programs in New York City alone. That, of course, means that outlets like WABC and WLS can charge more for advertising time, adding handsomely to their bottom line. The popularity--and profitability--of conservative talk shows means it will be tougher for the Democrats to achieve their number one broadcast goal: re-imposition of the Fairness Doctrine.

No wonder Mr. Obama was so willing to sign that letter to Arbitron.

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