CBS Plans to Drop Its Contract for Nielsen TV Ratings : ‘People Meter’ Counting Device Skews Numbers, Network Says

CBS Inc. on Monday told A. C. Nielsen Co. that it plans to drop its contract for Nielsen’s TV-audience research data this fall to protest what it said were the statistical failings of Nielsen’s new electronic nose-counting device, the “people meter.”

In taking the step, CBS followed the example of Capital Cities/ABC, which last December announced that it would not renew Nielsen’s contract because of its misgivings about the research. The two networks--both in peril of losing money this year--feel the Nielsen data under-counts their audiences and will hurt them in sales negotiations with advertisers.

The declarations appeared to be in part negotiating maneuvers designed to help the networks in those negotiations. CBS and ABC officials acknowledge that they may still sign with Nielsen, which is based in Chicago and is a unit of Dun & Bradstreet Corp.

Slap at the Firm

Still, the cancellations were a slap at the audience-research firm and are likely to cause further delay and turmoil in the networks’ “up-front” sales negotiations, in which they are now trying to sell commercial time for the television season that begins in September.

Nielsen could also suffer serious financial harm if the networks do not reverse their decisions, since they are the rating service’s largest customers, together accounting for about 35% of Nielsen’s sales, according to David Poltrack, vice president of research for CBS Broadcast Group. Nielsen is trying to increase its annual contract price this year for each of the networks to $4.8 million from last year’s $3.5 million, Poltrack said.

A Nielsen spokesman, Jo LaVerde, said the company would not comment because negotiations with the networks are continuing.

The people meter is a hand-held device that is installed in the households whose viewing habits Nielsen studies. Household members punch a button on the machine when they begin watching television and punch buttons again each time they change channels.

The people meter system is replacing the so-called diary method, in which each viewer’s choices are recorded in longhand, often by one member of the family.

NBC Complains of Flaws

While NBC officials have not declared any intention to drop Nielsen’s services, they, too, have complained that the research method is flawed. All three have asked for further testing of the device and have claimed that the meter distorts viewership patterns because many viewers won’t make the effort to push the buttons night after night.

CBS, which has traditionally been more popular with older and rural audiences, has charged that the meter study group is skewed toward the young, the urban and the better-educated, because such viewers are more likely to participate in such a research effort.

“There’s a bias toward people who are, in general, comfortable with technology,” Poltrack said.

He said the network has just concluded a study of the 1,000 households that were recently added to Nielsen’s study group and found that the group’s composition is skewed, much like the group of 1,000 whose habits Nielsen has studied since last fall. Twenty-six percent of the Nielsen sample have college degrees, he said, while degrees are held by only 21% of the population at large.

He said CBS made its announcement this week because the contract would have been renewed automatically unless such notice was given by July 15.