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ANALYSIS: Nielsen Rival—Real Or Ruse?

Time Warner's announcement that it has concluded a new seven-year
contract with Nielsen Co. sheds a whole new light on last week's
reported formation of a consortium aimed at opening up the measurement
field as online viewing grows. One might infer from the timing that the
newly formed Coalition for Innovative Media Measurement (or CIMM, as
the group is known) is less about bringing in new competition and more
about bringing the monopoly provider of TV ratings to the negotiating

"I think this [consortium] is more strategic thinking
rather than an operating plan with reality attached to it," said one
observer with a potential interest in the game.

Another insider
suggested that Nielsen is eager to wrap up long term renewals with big
media companies before set top box data becomes a reality and changes
perceptions of the TV ratings business. This person said: "Nielsen has
created a billion dollar business, with margins that are estimated at
40%. They have a monopoly and the bulk of their fees come from six
programming networks." Of those family groupings, Time Warner is
arguably one of Nielsen's largest client relationships. Other members
of CIMM include Viacom, NBC Universal, News Corp., Discovery, CBS and
Disney Co., all looking to challenge, if not overthrow, Nielsen's

TV industry players have spent the better part of
this week scratching their heads over what a new challenger might mean,
if that's what indeed proceeds. With upwards of a billion dollars wiped
from this year's upfront, the industry is putting its klieg lights on
measurement and big media companies are putting intense pressure on
Nielsen's costs and the nature of its services.

Beyond the pure
financial issues, the industry wants Nielsen to count viewers
adequately and move faster to track non-TV viewing. Missteps such as
Nielsen's July reissue of some regional ratings for NFL games have
aggravated companies that could have lost out on millions of dollars in
ad revenue as a result of such data tweaks which showed ratings upticks
once recalibrated.

NBC Universal is leading the charge inside
the CIMM consortium and has been working closely with News Corp. An
article published in the Financial Times last week said other
participants include Time Warner, Viacom, CBS, Discovery and Walt
Disney Co. Also involved are big spending advertisers Procter &
Gamble, AT&T and Unilever and media buying agencies Group M and
Starcom MediaVest Group. Agencies' and big marketers' interest in a
rival to Nielsen is in gaining better, quicker data about how viewers
move between the TV and the P.C., how they watch video and what they

At the forefront of the initiative is NBC Universal's
President of Research and Media Development, Alan Wurtzel. While he has
a good working relationship with Nielsen, he is also a vocal critic.
With NBC's status as an Olympic broadcaster and the fourth placed
broadcast network there is perhaps a greater imperative for parent
company NBCU to recapture and charge for fragmented viewership. Many of
NBC's comedies such as 30 Rock and The Office are among the most popular in the online and mobile arena.

who also moved to build industry consensus around commercial ratings,
has already created TAMI, or Total Audience Measurement Index, which
helped the company measure viewership of the Olympics on multiple
screens. Wurtzel promised to make data available next day, positive or
negative. In one instance NBCU's TV networks drew some 107.4 million
viewers, and when internet, mobile and video-on-demand viewing was
added in exposures grew to 113 million. TAMI data comes from Nielsen
Media Research, Omniture and Rentrak.

The industry is rife
with rumor about which measurement firms might be in the catbird seat
to either supplement or compete against Nielsen. One contender is TiVo,
run by former NBC executive Tom Rogers. In June, TiVo announced a
partnership with digital measurement firm Quantcast to create a cross
platform measuring service for TV and the Internet. With a sample size
of 35,000 households the venture is said to allow advertisers to
analyze ad effectiveness of both TV and online. TiVo is expected to
announce more news on that front in the coming weeks.

TiVo, there are really only a handful of players including the cable
industry's Canoe Ventures, which might be viewed as a potential
alternative though it is still working on its product. Dish Network is
said to be one of the most advanced players in the world of monetizing
set-top-box data. Dish had sold inventory and its set top box data to
Google to help it establish a new automated ad buying service, called
Google TV Ads. According to sources, that contract is in the midst of a
renegotiation and if unresolved would leave a dent in Google's nascent
service.  DirecTV also works with TNS Media Research to provide
advertisers with second by second ratings data.

The debate
will no doubt take greater shape next week at the Advertising Research
Foundation's Video Council get together on August 25. According to the
ARF Website, companies including TNS/DirecTV, TRA, Nielsen/Charter and
TiVo will be asked to discuss such things as "What is the single most
promising development your company may announce by year's end?"

every line item under scrutiny inside big media companies, Nielsen's
pricey C3 ratings - which even some Wall Street research departments
can't afford - are an obvious target. Perhaps not incidentally,
Nielsen's CEO is David Calhoun, a former vice chairman of NBC parent
General Electric who was tipped to take over from Jack Welch but lost
out to Jeffrey Immelt.

This week, Nielsen vice chairman and
executive vice president Susan Whiting reminded the industry that the
company had invested a billion dollars into measuring three screens, an
initiative first begun in 2007.  In a memo to employees sent out
Monday, Whiting said: "While our company policy is not to respond to
speculation or future announcements, we have been in direct contact
with many of our clients, including some cited in the original article.
Much of what was reported by the Financial Times remains unclear, and
many of our clients are themselves looking for answers to questions
raised by the story," Whiting continued. "What is clear, however, is
that three screen measurement is at the center of our strategy."

suggest the TV industry address other, more critical, problems such as
the need to update archaic TV station measurement. Beyond the top 23
markets, Nielsen panelists are still filling in paper diaries in 15
minute increments, a system that has been in place since the fifties
and is woefully out of step with the digital present. "It is laughable
that this is the state of measurement against what the internet is
capable of. Clients don't even know this. We get into the question of
here we have an incumbent industry dealing with the status quo when
they know change has to come. People lend themselves to the easy
consensus while ignoring the real under the hood issues of what's at

"We all want this," said one agency research executive.
"The path to getting there will be hugely expensive. This might just be
trying to drive learning. Content providers have a lot to gain."