Nielsen to Face Competition in TV Ratings Field : Media: Britain’s AGB, which scrubbed a costly attempt to dislodge the industry leader three years ago, will try again. The networks welcome the bid.

A. C. Nielsen Co., which has come under fire from the networks for alleged discrepancies in its television ratings reports, is about to have its position as the sole measurer of who watches TV challenged by the company that tried to start a competing ratings system three years ago.

AGB Television Research will announce, perhaps as early as today, that it is renewing a campaign to supplant Nielsen as the company that provides national television ratings to the networks and advertising community. Nielsen has had a virtual lock on the national ratings business for more than 30 years.

AGB’s service may be among several competing television ratings systems pitched by research companies in coming months. The networks contend that the current national ratings system is unreliable and are seeking an alternative to Nielsen.

Since early this year, the networks have been engaged in an increasingly vocal and acrimonious battle with Nielsen and advertising agencies over a sudden and steep falloff in television viewing levels. Although viewing levels have stabilized in recent months, the networks maintain that erratic dips reported in the first quarter have cost them collectively between $150 million and $200 million in lost advertising revenues.

All three have said they are changing their ad rate policies for the fall season to protect themselves against future ratings drops. Nielsen says it inspected its ratings system and found nothing wrong with it.

It will be London-based AGB’s second attempt to crack the U.S. market with a new television ratings system. AGB, which measures TV viewing in the United Kingdom and Europe, is the originator of the “peoplemeter.” It brought the peoplemeter to the United States in 1987, but scrubbed it less than a year later after losing $67 million.

British media mogul Robert Maxwell bought AGB four months later. Maxwell, who bought publishing giant Macmillan Inc. for $2.7 billion in 1988, has one of the largest media empires in the world.

Despite AGB’s determination to try the U.S. ratings market again, a workable alternative to Nielsen, which now uses its own version of the peoplemeter, could be years away. Network executives said building a ratings system from scratch would cost tens of millions of dollars, and it probably would not be fully operational until the fall of 1992.

Another potential competitor to Nielsen is Arbitron Ratings Co., a subsidiary of Control Data Corp. Arbitron competes with Nielsen in measuring local television and radio stations, but does not provide national ratings. For the past couple of years, Arbitron also has been operating its own version of the peoplemeter--Scan America--in Denver. Using sophisticated technology, it is able to tie the watching of TV commercials to product purchases.

Network executives said the current controversy surrounding Nielsen may prompt Arbitron to advance its plans to roll out Scan America nationally.

“We’re interested in a new and better system, and the only way you are going to get that is through competition,” said David Poltrack, vice president of research and marketing at CBS.

Poltrack declined to say whether CBS had decided to back the AGB proposal, but said the network is “willing to invest significantly in an alternative.” CBS helped finance AGB’s first attempt at introducing the peoplemeter.

Network sources said Maxwell visited CBS last week in New York to personally pitch the idea of re-launching AGB in the United States. The new company would reportedly be headed by Mark Booth, an American who once headed MTV Europe, in which Maxwell holds a 50% stake.

Each network pays about $5 million annually for Nielsen’s national ratings service, called Nielsen Television Index. NTI collects ratings information from 4,000 peoplemeters in homes around the country. Jack Loftus, a spokesman for Nielsen, said the company has “heard a lot of rumors” over the years about potential competitors, but did not know anything about AGB’s plans. “Nielsen welcomes competition,” he added.

Alan Wurtzel, senior vice president at ABC, said the “fundamental problem” with the Nielsen peoplemeter system is its use of “single-source households” to collect ratings information. He and other network researchers want Nielsen to install a two-tiered measurement system. Under that system, one group of homes would record what channel is being watched and another group, who is watching.

Wurtzel and other network executives contend that the Nielsen system under-reports viewing levels because people forget to push the button on the remote control device that signals who is watching a program. Until Nielsen introduced its version of the peoplemeter three years ago, viewers recorded programs they were watching by making entries in diaries.

The diary method, however, favored regularly scheduled programs--as opposed to specials or one-time viewing--since people often recorded what they watched hours or even days afterward. Viewers tend to remember only those programs they watched on a regular basis.