No More Free Ride For Non-Subscribers

16

In 2021 it will be harder for non-paying Nielsen subscribers to get on a buy when ratings are being used. Non-subscribing radio stations have always been listed in the ratings, whether that radio station purchased the data or not. Agencies and buyers would see all the stations ranked in a market, and with a wink and a nod, the station would know where they ranked as well, and position itself in a buy.

Under Nielsen’s new Subscriber First initiative, non-subscribing stations will no longer be listed in summary data that the buyers see. They will still be listed in respondent level data, which is an upgrade in price from the summary data.

Nielsen Managing Director Brad Kelly tells Radio Ink there’s a fundamental belief at Nielson that people paying for the measurement of their industry should benefit from it, versus people who do not support the measurement of their industry. “This is effectively addressing the free rider syndrome that has gone on for too long. We believe it’s an issue of fairness. We’ve taken a number of steps in recent years to create a sharper distinction between subscribers and non-subscribers and how they’re depicted in the data and the benefits they receive from the data.”

Kelly goes on to say that this change is more than an issue of fairness, it’s an issue of economic sustainability. “I’m not going to whitewash that. This week we debuted the headphone adjustment factor. That’s something we’ve been working on and building to. It’s obviously a huge benefit to the industry, but it’s one of many. We have the multi-channel PPM encoding. We’ve got passive monitoring going on. We are monitoring the quality of the codes, alarms will go off in the station and Neilson if a code goes down which is new. A new software encoder that we are working on. These are pieces of hardware that we’re shipping to radio stations across the country with real significant costs. So stack that on top of the tremendous amount of money we are pouring into PPM markets to keep our KPI’s high.”

There’s also the added reality of how COVID has impacted every business in the Unite States. Nielsen was not exempt from the realities of the pandemic. The company had to lay off 3500 people and close 9 markets. Kelly says when you have this juxtaposition between the expectation of investing when clients are unwilling and frankly unable to continue to make those investments, something has to give. “There are really only two levers to pull. One is expense reduction which we have done in the form of market closures. That is the less appealing approach to addressing economics. It’s not good for the industry or Neilson but it’s an approach. We believe the Subscriber First initiative is the other approach. The ability to grow revenue because we hope that this new policy will encourage non-subscribers to step up and support the measurement of their industry. Through that we can continue to invest and innovate to keep the industry moving forward. If we’re wrong then we will have some tough decisions to make down the road, but at least for 2021 we are committing to no additional market closures.

When the change rolls out in 2021 there will be exemptions. All minority owned stations and non-profits will not be impacted. They will be pressed into the data with a single mention.

Kelly says the overall impact in the PPM markets will be minimal. He says in the PPM markets, 97% of the top 20 stations currently subscribe. “If you run a top 20 ranker and then do it again 48 times for the 48 PPM markets you have a list of 960 radio stations. After we apply this policy 21 stations will fall out. So 939 will continue to show either by virtue of the fact they already subscribe or they are part of the exempt group. That quantifies the size of the impact of this policy change.”

The changes will happen in three waves next year. PPM markets go first in January. The continuous diary measurement markets (51-100) go in April. The smallest diary markets in the Spring.

Please share your comments below and how you believe this will impact the industry.

16 COMMENTS

  1. No one has mentioned that subscribers and non-subscribers area ALREADY graded differently. It’s called Total Line Reporting. Subs get to combine the audiences from simulcasts/streams/translators into one reported number. Non-subs don’t get that luxury. It’s like the kids in the front row of the class get automatic extra credit, but the kids in the back row don’t. Ratings data in markets with subs and non-subs are already skewed toward the subscriber and thus inaccurate.

  2. Nielsen Audio ratings have been full of inaccuracies for years. When 2 people who were on the Nielsen Audio panel, who were loyal listeners of one of my stations left the panel in the same month; my station went from 2nd Adults 25-54 to 13th in one month. Did my station programming the same music, with the same personalities really lose a third of its audience in a month? Come on. Brad Kelly and Niesen should be ashamed of themselves. This is nothing more than a shakedown of nonsubscribing broadcasters.

  3. So is Nielsen exempting stations owned by women and minorities because Nielsen executives are prejudiced and believe they are all poor and can’t afford it? Or because Nielsen executives are bigots who think women and minorities are all too stupid to know how to subscribe?

    It must be one or the other, or a combination of both, because there is no legitimate reason for the exemptions. None.

    If Nielsen thinks most women-owned and minority-owned stations can’t afford to subscribe, then fine. But such an exemption should be based on the same financial criteria for all stations regardless of who owns them.

  4. Nielsen stopped caring about smaller market stations the day they took over from Arbitron. We no longer get calls asking us to subscribe. When we call Nielsen, we never receive a return phone call. At the Texas Association of Broadcaster’s last convention, I asked a question that the person at their booth couldn’t answer. They took my card and promised that someone would call. Never happened. Since I haven’t seen numbers in at least 5 years, I wonder what how many respondents they are using in the smaller markets. That number had been cut in half even by Arbitron. Finally, how can you call them “rankings” or “ratings” when you don’t include all of the stations?

  5. “Under Nielsen’s new Subscriber First initiative, non-subscribing stations will no longer be listed in summary data that the buyers see. They will still be listed in respondent level data, which is an upgrade in price from the summary data.”

    For the reading impaired, this means that agencies that want the full market will pay more, BUT CAN STILL GET IT IF THEY CHOOSE TO PAY FOR IT.

    For many moons, we’ve heard the question “Why do stations pay so much but agencies don’t”. This initiative will shift more of the cost to agencies.

    Meantime, those who choose to not subscribe – likely because they found the cost/benefit out of whack – now have zero cost and ZERO benefit. Sounds about right.

    Ever hear “the customer is always right”… by definition, a customer pays for a product. The others are simply tire kickers. (And before you bring up Facebook, please understand you’re not their customer – you’re their product.)

  6. “Small market” and “Nielsen” have been mutually exclusive terms, any way you measure it, for a long time. Small markets should be especially relying on personal, “relationship” sales, anyway.

  7. So once again the county-by-county small market stations lose! Not only are Nielsen’s numbers a year behind now you are shutting out agencies that could potentially buy our stations in smaller markets. Not everyone can afford to pay for year old data in a non PPM market. Again your interpretation of how it affects the PPM markets solidifies that that’s all you care about….that and charging more!

  8. Nielsen has become too pricey for smaller ranked markets. We’re getting agency rates in the $3~$5 dollar range (gross, not net), while the top country in the market can barely crack $15 in drive time. So it makes no economic sense to pay $15K for two stations–or around $75K for a cluster when the agencies won’t buy enough to support those rates.

    Local direct advertisers have only 2 questions: How Much? How Many? They don’t care about “the book.”

    You will see a number of markets “de-rated” as I Heart has decided not to renew their small markets–suspect they had a “blanket” contract that keep their Nielsen bill down in these markets.

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