What the new Arbitron rules mean to you

ArbitronlogoHere is a summary of the new Arbitron rules, effective Fall 2006, and what they might mean to you:

1. Public and non-commercial radio stations will be included in the electronic local market reports (eBook), in the data sets used in buy/sell software applications such as Tapscan, Smart Plus and third party software applications

Implication: The prestige and profitability of public radio has just skyrocketed. And your ability to get on a buy has just been complicated. In many markets public radio stations are surprisingly high-ranked (and I say “surprisingly” because they have not been in the book and have been “invisible” to advertisers – not because I am surprised). Result: Lower revenues for your station, if not lower shares.

Another implication: Public radio will now be on commercial radio’s radar like never before. Commercial radio will more aggressively learn from public radio, compete with it, and counter-program it.

2. At the Arbitron Radio Advisory Council meeting in July and in other forums, Arbitron had discussed plans to report individual Satellite radio channels in the Fall 2006 survey reports. The company has since decided that it will collect and analyze additional data to further establish and test the rules for handling various types of entries that could be satellite listening, including entries that could be assigned to either satellite or over-the-air stations.

Implication: Satellite radio is not being accurately measured in Arbitron now and that will not change anytime soon. Listening is stronger than what you’re seeing.

3. “Internet” and “Satellite” are added to the checklist and sample appearing on the inside cover of the diary. “Thanks to these improved instructions, we expect the volume of satellite entries to rise and the quality of entries to improve. We will review the content of these entries over a period of surveys to better inform and enhance our edit rules,” said Mr. Feldhaus.

Implication: More Internet and Satellite radio listening will recorded. Lower shares for your terrestrial station.

4. “Listening” has been redefined:

“Listening” is any time you can hear a radio station – whether you choose the station or not. You may be listening to a radio on AM, FM, Internet or satellite. Be sure to include all your listening.

Implication: If you haven’t believed me before, maybe you’ll believe me now. When listening is defined as broader than “radio” alone, then you are no longer in the “radio business.” You’re in the business of audio entertainment and information, regardless of distribution channel. That little home-grown Internet radio station from Zimbabwe is now your competitor. When “Listening” is defined according to things that do not require a radio, you are no longer in the “radio business.” Get it?

Result: More listening to “other” recorded. Lower shares for your station.

We’ll have more on the new diary designs later this week.

5. Starting with the winter 2007 survey, Arbitron will begin collecting HD radio facilities information as part of the station information collection process.

Implication: Even if there were HD radios in circulation there will be no listening measured until 2007, and based on the likely confusion of dial position (e.g., 93.3 vs. 93.3-2), I find it unlikely that Arbitron ratings for HD will EVER be accurate under the diary methodology. In fact, it is very likely that the most “popular” HD side-channels will directly cannibalize their terrestrial parents and vice versa. At least in Arbitron.

Result: More listening to “other” recorded. Lower shares for your station.

The good news is that Arbitron is moving in the direction to more accurately reflect reality.

The bad news is that much of that reality is considerably more competitive than what’s beside your station on the radio dial.

And HD is the future?

* = required field
  • Steve Wyrostok

    Bitter pill but good news all around. Public Radio has eclipsed commercial radio in many ways in understanding how to contemporize programming, think forward, and reach audiences with quality programming that attracts mass audiences. They’re not your father’s PBS anymore.
    There are many lessons to be learned for commercial radio and having the non-coms showing will serve as impetus for a host of improvements (hopefully) for teh incredibly stagnant and out of touch atmosphere that continues as the terrestrial paradigm.

  • George

    Interesting. You’re saying that the prestige and profitability of public radio is skyrocketing. But the exact opposite was the main subject at the latest Public Radio Conference. NPR execs are extremely concerned about audience drops and an aging demo. Ratings peaked two years ago, and have been on a steady decline. If you read what the folks in public radio themselves are saying, you wouldn’t be so optimistic.
    I know it’s a lot of fun identifying enemies, but the fact is that public radio should be lower on the radar screen than satellite. If you think commercial radio is dull, spend a day listening to NPR. You’ll long for another ten in a row.

  • Mark Osborne

    Another implication: Public Radio will start getting competition.
    Face it. It’s a good enough product, but it’s almost never had true “format competition”.
    If revealing Public Radio’s numbers makes it more attractive to advertisers… excuse me… “underwriters”, then other signals/delivery systems will start to take them on.
    Party’s over, NPR.

  • George

    I’ve worked in public radio. Public radio has competition. In addition to NPR and Public Radio International, you have a system that has turned every major station into its own syndication company, seeking corporate, foundation and gov’t support. The Arbitron concept that public radio is a format is great marketing on their part, but has no real operative basis in reality.
    The other thing is that we’re talking about non-profit radio. You’re not supposed to be competing. You SHOULD be co-operating. The problem is there’s too much ego to co-operate.
    I mean right now, there are hundreds of non-commercial LPFM stations available. Someone could easily start a national network for LPFM, and turn it into a force. But in the end, it’s non-profit, so why bother?

  • Mark Osborne

    When those enormous Public Radio shares see the light of day, somebody’s going to want a piece of that action.
    There’s no rule that says “Public Radio Type Programming” (I know that’s terribly broad, but you catch my drift) has to be non-profit.
    Put the programming on a commercial frequency — and/or online — build some audience, and sell some spots to those NPR-loving clients who’ve always wished they could buy that audience.
    Bet it’s gonna happen.

  • Just remember, that Public Radio SPENDS MONEY to generate those shares. How many commercial radio bigwigs will want to follow suit?

  • Guys, it’s simple math. Even if the PBS station in your market ends up with a 1 or 2 RATING, that’s 1% or 2% of the potential audience that you don’t have to divvy up among yourselves. You’re about to carve up what’s left into thirds with your HD programming. And radio is a CPP medium whether you like it or not. Agencies and big advertisers will only pay so much per RATING POINT. Can you make your nut and keep your stockholders and Wall Street happy if you end up with less than half a percent of the total population to sell?
    And even tougher, can you lay off enough talent, programming minds, and newspeople and cut back enough research to make up the difference? I doubt it. You better put some money…and creativity…back into your on-air product to attract enough audience to sell. And quit counting on HD or any other instant savior to help you pay the power bill.

  • George

    “Public Radio SPENDS MONEY to generate those shares.”
    Remember Mark. I worked there. I can tell you that their PR budget is a lot smaller than any of the radio groups. However, they get something commercial radio doesn’t get, which is positive print press.
    The fact is that a handful of big market stations get great ratings, but the majority of stations don’t show have any audience to speak of. That speaks more of those specific stations and their particular markets than it does for public radio in general. Some of those big market stations spend money to get ratings, but they largly depend on word-of-mouth.
    Read articles in last week’s Philadelphia Inquirer and Boston Globe. For the first time, even the print press is starting to turn on them. They are portrayed in both articles as being out of touch with their audience.

  • George, I was on the panel that opened the PRPD that you spoke about. And I have worked with Public Radio before – and even now.
    By spending money, I mean the PRODUCERS of the content, not the distributors.
    And keep in mind that Christian and other stations are in many cases more problematic for their commercial peers than NPR-style stations.

  • Jim

    “Guys, it’s simple math. Even if the PBS station in your market ends up with a 1 or 2 RATING, that’s 1% or 2% of the potential audience that you don’t have to divvy up among yourselves.”
    1. I assume you mean NPR, not PBS;
    2. I assume you mean a 1 or 2 share, not a 1 or 2 rating (fat chance on that!); and
    3. I assume you do understand that the non-commercial shares are already part of the 100% total. The only change in Mark’s first item is that now they will be shown in “the book”.

  • John

    Nationally, public radio has a 5 share. Individual stations typically pull 2.3 – 2.7 shares. The most successful stations often pull 4s and 5s. A few pull 6+ shares in top-50 markets. All 12+.

  • George

    “By spending money, I mean the PRODUCERS of the content, not the distributors.”
    In the case of NPR, the producers ARE the distributors. NPR owns both.
    You must be comparing national producers to local radio stations. The budgets for the national commercial radio networks and syndicators are more than the producers of the national public radio networks. I have the annual reports to prove it.
    Almost all of the programming on a typical public radio station is national programming, mostly originating from NPR. More than half of the programming on a typical commercial FM station is locally originated.

  • You got me, Jim. I did mean NPR, though the same is true of PBS TV stations and the effect they have on diluting viewership.
    And in most of the markets I buy, I DO mean a 1 or 2 RATING, especially if you include the combined audience of all the other stations below 92.1.
    Finally, I do know they have always counted in the total share, and the fact is, they have shown in respondent-level (Maximiser) data for quite some time. But when they start showing up in the rankers stations typically run, advertisers are going to gasp in dismay.
    My point is this: lose a RATING point here and a point there, whether it is to the NPR station, the iPod, the cell phone, the kid’s movie on the DVD in the backseat of the mini-van, and pretty soon the part of the pie the typical radio station will have to sell is mere crumbs.
    But ever the optimistic (former) radio guy, I think somebody is going to realize that powerful, compelling programming can make enough folks put down their iPods or cell phones and seek out the station…whether it’s on the FM band, the Internet, or delivered by smoke signals.

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