When Arbitron’s new corporate owner decided to change the name of the radio ratings monopoly only a few weeks after the Federal Trade Commission approved its $1.3 billion purchase on Sept 30, that news didn’t bode well for the company’s 1200 employees. It didn’t take long for the other shoe to drop: on November 14, the radio ratings firm, renamed as Nielsen Audio, let go about 400 Arbitron employees. What once was a powerful brand — albeit often cursed by radio station managers — is now just a division of an global research provider.
For the past 30 years I’ve had a ring side seat, inside and outside of Arbitron, watching it rise and fall…and finally disappear. Before I worked at Arbitron TV in the 1980’s, I worked in Public Radio and for an NBC and ABC O&O radio stations in Washington, DC. My research career started in April 1979 when I began my first adult job commuting around the DC Beltway to Beltsville, MD to work as an Arbitron TV Product Specialist. How long ago was that? I used a keypunch machine to write COBOL programs for a CDC mainframe. Yes, it was a long time ago.
Back then, Arbitron and Nielsen were fierce competitors in the local market TV business, where the company started before it developed a radio measurement service in the 1960’s. Nielsen always got most of the attention because they owned the national ratings business, a situation Arbitron hoped to remedy with ScanAmerica in 1990. It was a bold move to one-up Nielsen with advanced on-screen respondent prompting system and a hand held scanner for panel members to record their purchases. ScanAmerica championed “BuyerGraphics,” TV ratings flavored with household purchase behavior. But while Arbitron focused on bleeding-edge technology, Nielsen countered with business strategy, flanking its smaller competitor by stealing TV station clients and depriving Arbitron of a previously dependable revenue stream. By lowering prices and signing TV stations during a period when broadcasters were consolidating their research expenditures, Nielsen effectively forced Arbitron out of the TV measurement business. ScanAmerica was discontinued in 1992 after 10 months of operation. Arbitron’s TV division was shuttered in 1993, laying off over 700 people.
That still left the company with a valuable radio ratings monopoly. Arbitron introduced the Portable People Meter (PPM) in 2007, an advanced technology that decoded inaudible codes that identified broadcast sources which replaced weekly paper diaries previously used. It’s assumed that ownership of the PPM patents helped justify the $1.3 billion that Nielsen paid to acquire Arbitron.
But it’s also likely that about a third of Arbitron’s former employees are looking for work as a result of factors far beyond their control: market share and market strategy. Having a monopoly in radio ratings doesn’t have the same attraction it once did. Radio is a static business (no pun intended) and there’s very little room to grow. The radio business is likely to contract further as Internet based streaming alternatives reduce consumers reliance on terrestrial radio. Arbitron by itself was little threat to Nielsen; but if the company were acquired by a global research firm, that combination could have posed a formidable threat to Nielsen. Although $1.3 billion sounds like a lot, Nielsen’s directors probably viewed it as good insurance policy.
For decades, radio stations refer to Arbitron as “ARB,” a throwback to the early 1960’s when the company was known as the American Research Bureau. Despite having being renamed Arbitron, Arbitron Ratings and The Arbitron Company over the years, the ARB monicker stuck. It will be interesting to see if radio veterans embrace Nielsen Audio as the companies new name, or behave like liberal Democrats and drop the “Reagan” from National Airport everytime they fly in and out of Washington. Although Nielsen has deep-sixed the Arbitron name, this might be one tradition that radio stations aren’t ready to give up quite so easily. ##
Dave Zornow worked at Arbitron, Arbitron Ratings and The Arbitron Company from 1979 to 1989 in TV, Market Research, ScanAmerica. During that time he also worked as product manager for Arbitron’s first PC based service, Radio Arbitrends. He founded TNG Research in 1991, a media research and app development consultancy, after working at MTV Networks.