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Arbitron announced today that it will delay the commercialization of its Portable People Meter (PPM) radio ratings service in nine markets: New York, Nassau–Suffolk and Middlesex–Somerset–Union will be delayed by nine months; Los Angeles, Riverside and Chicago by six months; and San Francisco, San Jose and Dallas by three months.In these nine markets, Arbitron will extend the use of the paper and pencil diary system that has been serving the industry since 1965, according to the company.
Arbitron has come under fire for its PPM ratings system in recent weeks, facing criticism that its sample sizes in some markets - particularly in New York - are too small and therefore return skewed figures.
According to a release, Arbitron will “continue to work with customers, the Media Rating Council, other industry organizations and community groups on the research and business issues related to the Portable People Meter radio ratings service in local markets.”
Last week, Arbitron invited some of the critics of the PPM to meet and discuss what broadcasters want from a measurement service. Cox Radio president and CEO, Bob Neil, responded that, “I’ve had many of these meetings with Arbitron people over the years and it’s been a gigantic waste of time.”
Steve Morris, chairman, president and CEO of Arbitron, says the company is still confident in the audience estimates that are being returned by the PPM, but that because of feedback from customers, the Media Rating Council and “other constituencies,” they have decided that “the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues.”
Arbitron intends to introduce the Portable People Meter service in Atlanta, Detroit, Washington, D.C., and in subsequent markets, as originally scheduled.
As a result of its decision Arbitron is updating its previously issued guidance to reflect the financial impact of delaying commercialization of the PPM. Earnings per share (diluted) for 2007 are currently estimated to be between $1.30 and $1.35 as compared to its previously issued earnings per share guidance of $1.35 to $1.45.
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