BATTLE BEGINS OVER THE PEOPLE METER

A battle among television industry statisticians, programmers, producers and advertisers went public Thursday at the Beverly Wilshire Hotel. An industry audience there witnessed the combatants’ notably civilized exchange over the “people meter”--a controversial new audience research device that promises to change dramatically how A. C. Nielsen Co. judges who watches what on American TV.

The chairman of the firm that has been synonymous with measuring what America watches on TV since the 1950s, said the new device will better count the audience of today’s “proliferation of program and channel choices.”

That may be true, countered the chief research executive of CBS, but the people meter is “a flawed system that is biased against us.”

The Nielsen firm has been under pressure from new competitors to offer the three networks--and a host of other stations and cable networks--faster, more detailed and more reliable data. Since the $8 billion that advertisers spend annually on TV hinges on the numbers that Nielsen generates, the debate over Nielsen’s new polling system is anything but academic.

Nielsen’s answer? The people meter, a new electronic polling system that the company says can measure the viewing preferences of specific segments of the TV audience more easily, more quickly and more reliably than the handwritten diaries and older, passive electronic meters currently in use.

The ratings firm has been testing its new meters for three years, but none of the interested parties agrees on what the result of those tests signify.

And the four-sided disagreement went public at Thursday’s luncheon before a ballroom full of industry insiders, advertisers, producers and interested spectators brought together by the Hollywood Radio and Television Society.

In one corner: the researchers--represented by Nielsen’s chairman, Arthur C. Nielsen Jr.--lauding the people meter’s flexibility for providing more detailed (and quicker) demographic information, including age, sex, education and income factors, to advertisers and programmers alike. “The people meter should deliver not only more accurate basic information, but . . . (should) do so in a more timely manner,” Nielsen said.

In the other corner: the networks--embodied by David Poltrack, CBS/Broadcast Group’s vice-president for research--contending that Nielsen has rushed the people meter onto the market too hastily, and that the company’s expectations (and fees) for the new service are not in line with current test results. Poltrack agreed that Nielsen’s old method of audience measurement--using handwritten diaries and outmoded “audimeters”--was “anachronistic,” but added: “However, at this time, we believe that the people meter system . . . has not reached (its) potential for success.”

In yet another corner: the advertisers--with the J. Walter Thompson Co.’s Richard Kostyra as their agent--blaming Nielsen for being too slow to introduce the people meter system in the United States’ television market, but agreeing that advertisers do need more detailed demographic information to work with. “We’ve been getting vague, muddy information for quite a while,” said Kostyra. “The people meter is one good answer toward clearing up the picture.”

And in still another corner (or, rather, caught in the cross fire): the TV producers--represented by Paramount TV president Mel Harris--complaining that the highly detailed audience research that the people meter system could provide will make the producer’s job much more difficult and complex. “(The system) represents our greatest programming challenge yet,” Harris stated. “There will be more opportunities for production, but success--creative and financial--will be much more difficult to achieve.”

But the behind-the-scene struggle--negotiations between the networks and Nielsen--has already begun. None of the three major networks have renewed their contracts for the Nielsen services.

The networks fear that the people meter will lead to lower overall ratings numbers that, in turn, will drive down the rates that they charge advertisers. Adding insult to that injury, say the networks, Nielsen wants to charge them nearly one-third more for the new people-meter service.

“(Either) zap the visitor with a device that looks something like a remote control for a TV set”--a reference to the appearance of the people meter control--”(or) to immediately head off to Big Sur, never to be heard from again,” said CBS’ Poltrack of his company’s choice presented by Nielsen.

(Poltrack said that Nielsen wants to increase his network’s annual fee to $4.8 million from $3.5 million, which goes far to explain why CBS has been negotiating with AGB Television Research Inc., a people-meter-wielding British company seeking to break into the audience-measuring business now dominated by Nielsen and rival Arbitron Ratings Co.)

The networks’ previous beef with people meters--that the test samples were too small to be statistically meaningful and that the system does not accurately reflect the American TV audience--was brushed aside by Nielsen, who stated the system’s start-up sample, ready to begin this fall, would be “2,000 homes and double that number by the fall of 1988.” (Currently there are 1,700 metered households and 2,600 diary households on the Nielsen rolls.)

Nielsen did express mild concern with what he termed the new system’s “cooperation rate”--how many Nielsen families were using the new devices--but added that it was normal for new technologies to work their way to familiarity slowly.

Nielsen also lauded the simplicity of using the new devices for the responding families. Whereas the previous diary method was cumbersome and too vague for the current multiplicity of programming, he said, the people meter--which is simply turned on and off when various members of the household are watching a particular program--is easier to use and much more precise.

But Harris disputed the value of the more detailed information, humorously citing wildly conflicting information yielded during people meter test runs: 39% of adult males making more than $25,000 annually watching one show, while 69% of adult males making more than $25,000 are watching another show--at the same time.

And Kostyra, to the gasps and hisses of the audience, mentioned that the higher-education, higher-income skewing of the people meter test results (acknowledged by all panelists) didn’t bother advertisers at all. “What do we care what under-educated viewers with no disposable income are watching?” Kostyra stated coolly. “They don’t interest us at all.”