New York AG To Investigate PPM; Arbitron Testifies Before NY City Council
September 10, 2008

New York state Attorney General Andrew Cuomo has announced his own investigation into Arbiton's PPM, following last week's news that the FCC would ask for comments from the public on PPM methodology.

According to the New York Daily News, Cuomo wrote in a letter to Arbitron that "A significant and improper decline in ratings under the PPM methodology could cause minority stations to suffer drastic reductions in advertising revenue. As a result, the Attorney General believes a full investigation of Arbitron's deployment of the PPM methodology is warranted before these sudden and possibly irreversible consequences are imposed on minority radio stations."

Arbitron responded to the Attorney General's subpoena with the following statement: "The company maintains that its Portable People Meter radio ratings service is fair, reliable and fully represents the diversity of New York radio markets. The media industry has demanded a more precise and credible measurement tool for radio just as they have for other media."

"The media industry should be concerned about the attempts to supplant or short-circuit the Media Rating Council accreditation process. The MRC was founded at the behest of Congress. Throughout its 40 plus years of service, the MRC has been a driving force behind the vast quality improvements in the ratings services that research companies have been delivering to the advertising and media industries,” said Steve Morris, Chairman/President/CEO of Arbitron.

Meanwhile, the New York City Council is holding a hearing today as to the validity of the PPM's measurement of minority stations. Arbitron's methodology has come under attack in recent weeks from the NABOB (National Association Of Black Owned Broadcasters), Association of Hispanic Advertising Agencies (AHAA), Spanish Radio Association (SRA) and others for its measurement of stations aimed at Hispanics and African-Americans.

Arbitron has released a statement summarizing its testimony before the Council. In the remarks of Arbitron's Steve Morris, and in documents submitted to the City Council, Arbitron emphasized that:

• The participants in the Arbitron Portable People Meter (PPMTM) radio ratings services are as representative of the diversity of New York and other top markets as diary respondents are today;
• The fundamental techniques used to recruit PPM respondents in New York and other markets are the same as Arbitron uses for the diary;
• The difference between PPM ratings and diary ratings is a function of the survey tool, not the sample. PPM collects actual exposure; the diary, recall-based 'habitual' behavior;
• The paper and pencil diary allows loyal listeners, of any and all formats, to overstate their habitual listening;
• Broadcasters of all formats, including urban and Hispanic, who have embraced PPM, have improved their audiences and their standing in the marketplace;
• Arbitron will continue to adhere to the Media Rating Council Voluntary Code of Conduct and will continuously strive to improve the PPM radio ratings service;
• Arbitron remains committed to working constructively with the Council and with clients in the radio industry to address specific diary-to-PPM transition issues.

Arbitron reiterated that it does not believe the FCC has jurisdiction over the company, or its operations and assets, and consequently lacks the authority to commence a Section 403 investigation. Arbitron added that it "has great respect and appreciation for the work of the City Council and for the critical and unique role that Black and Hispanic-targeted radio provides as a voice for the diverse communities of New York City."


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