NABOB's Winston Slams PPM At House Hearing
July 10, 2009 at 11:11 AM (PT)
Testifying before the House Judiciary Committee YESTERDAY, NATIONAL ASSOCIATION OF BLACK OWNED BROADCASTERS (NABOB) Exec. Dir and General Counsel JAMES WINSTON spent most of his time talking about the negative impact of the PPM. While acknowledging the need for electronic measurement -- even during industry-wide tough times -- WINSTON asserted that PPM's flawed methodology has hurt minority radio broadcasters' far more.
Here are excerpts from his comments:
ARBITRON has failed to achieve [MRC] accreditation in almost all markets in which PPM has been released. PPM initially did receive MRC accreditation in the HOUSTON-GALVESTON market utilizing a different recruitment methodology with an address-based sample. Subsequently however, ARBITRON abandoned address-based sampling and in-person recruitment in all other PPM markets. In all other PPM markets, ARBITRON has deployed a sampling methodology predicated on telephone-based recruitment which is cheaper to implement than HOUSTON’s accredited, address-based recruitment methodology.
Advertising revenue in the N.Y. market is down on average by approx. 28%. Inner City Broadcasting estimates that the PPM is responsible for an additional 30% revenue loss for its stations as compared to the general market
ARBITRON’s telephone-based methodology is entitled "Radio First" [which] relies on random digit dialing. Of the 15 markets where PPM is now in commercial use, ARBITRON’s recruitment methodology has achieved accreditation in only one of those markets, RIVERSIDE-SAN BERNARDINO.
Since PPM became operational in NEW YORK in OCTOBER 2008, minority broadcasters have experienced an average 40-60% drop in AQH; coupled with a corresponding drop in the average rates minority broadcasters are able to charge to advertisers who have been unwilling to accept higher ad rates to reach what appears to be a smaller audience.
SBS owns two stations in NEW YORK: WSKQ reports a 55% decline in its AQH Rating year-to-year; and WPAT has experienced a 67% decline in its AQH Rating year-to-year. SBS has been forced to reduce staff by 37% as a result of corresponding revenue declines.
Recent estimates indicate advertising revenue in the NEW YORK market is down on average by approximately 28%. However, while radio industry revenues as a whole are down given the current economic crisis, INNER CITY BROADCASTING Corp, estimates that the PPM is responsible for an additional 30% revenue loss for its stations as compared to the general market. Since the introduction of PPM in NY, INNER CITY has significantly reduced the staff of its programming departments. And Inner City’s San Francisco station, KBLX, has been forced to lay off 13% of its staff and cut salaries by 10%
[Regarding the cell phone-only problem] ARBITRON’s PPM system does not use address-based sampling and in-person recruitment ... the most effective ways to reach young and minority audiences. However, these sampling and recruitment methods are more expensive to implement than PPM’s landline telephone sampling and recruitment ... Thus, ARBITRON has gone for a "quick and dirty" approach, as opposed to the most accurate approach.
ARBITRON contends that NABOB is opposing progress, which ... deflects attention from NABOB's true objection -- the faulty implementation of electronic measurement. NABOB believes that, if implemented properly, electronic measurement could indeed lead to improved information and data.
However, ARBITRON has not implemented PPM correctly, and the refusal of the MRC to accredit it only reinforces the accuracy of NABOB’s assessment. ARBITRON has rolled out an electronic measurement system established by taking short cuts and cost-saving measures that have compromised the potential of its product and the information and data it has released into the marketplace -- all at the expense and harm to minority broadcasters.