TRENTON
-- Attorney General Anne Milgram announced
today that the state is suing Arbitron,
monopoly provider of audience ratings data
to U.S. radio stations, charging that its
use of a new, unaccredited system for measuring
listenership harms minority consumers and
violates New Jersey’s consumer fraud,
advertising and anti-discrimination laws.
Based
in New York City, Arbitron is a longtime
seller of survey-based ratings data to radio
stations serving New Jersey, as well as
those in broadcast markets across the country.
Filed
today in the Law Division of Superior Court
in Middlesex County, the state’s four-count
complaint focuses on Arbitron’s new,
electronic Portable People Meter (PPM) method
for determining audience share, which the
company has launched for use in a number
of major radio markets, including the New–York-New-Jersey
market.
When
previously test-sampled in the Philadelphia-New-Jersey
and New-York-New-Jersey markets, the PPM
methodology was denied accreditation by
the Media Ratings Council, a non-government
entity that tests audience ratings for media.
In
addition, in markets where the PPM system
has been sampled, ratings for minority stations
have declined. The state’s lawsuit
describes the PPM system as unreliable and
fraught with “flaws that undercount
radio listeners in certain racial and ethnic
groups.”
“The
existence and survival of radio stations
is premised on advertising revenue, and
advertisers rely heavily on Arbitron’s
ratings in deciding where to place advertisements,”
said Attorney General Milgram. ”The
state’s position is that these new,
unreliable ratings being generated by Arbitron
severely harm those radio stations serving
minorities, as well as minority listeners
themselves.”
The state’s lawsuit charges Arbitron
with engaging in unconscionable business
practices by using its radio rating monopoly
to discontinue its former, accredited measurement
product and forcing broadcasters and advertisers
to use ratings data derived from a PPM system
“that is not accredited and possesses
significant methodological flaws.”
The
suit also charges Arbitron with engaging
in deceptive business practices by failing
to disclose important flaws identified in
the PPM method, including shortcomings in
its accuracy, and its documented under-representation
of young listeners, as well as African-American
and Latino listeners.
Arbitron
also misleads broadcasters, advertisers
and others, the state charges, by suggesting
its PPM method for the New-York-New-Jersey
market was generally accredited when, in
fact, a different PPM approach used in the
Houston radio market was the only PPM method
to receive an accreditation.
In
addition, the lawsuit charges that Arbitron
has violated the New Jersey Law Against
Discrimination by offering broadcasters
and advertisers a ratings system “that
disparately harms radio stations serving
racial and ethnic minorities.”
Specifically, the complaint charges that
Arbitron’s use of its flawed PPM system
and its “systematic undercounting
of younger-age demographics and ethnic minorities”
causes those populations to receive an inferior
service compared with non-minority populations.
In addition to maximum statutory penalties,
the state’s lawsuit seeks to stop
Arbitron from selling audience ratings data
generated through the PPM methodology.
The state’s litigation against Arbitron
is being handled by the Affirmative Litigation
Unit within the Division of Law.
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