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What the new Arbitron rules mean to you

Here 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?

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