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Arbitron settles PPM discrimination suit with Calif. attorney general
for $400,000
(March 26, 2012) California Attorney General Kamala D. Harris today
announced a settlement with Arbitron Inc., the nation's dominant
provider of radio audience ratings, over allegations that the method it
used to collect ratings information discriminated against radio stations
with predominantly African-American and Latino audiences. The settlement
is the result of a consumer protection lawsuit filed jointly by the
State of California and the cities of Los Angeles and San Francisco.
Attorney General Harris, Los Angeles City Attorney Carmen A. Trutanich
and San Francisco City Attorney Dennis Herrera alleged that Arbitron
Inc.'s implementation of "Portable People Meters" (PPM) to measure radio
station listenership in California beginning in 2008 violated the
state's Unfair Competition Law, False Advertising Law and Unruh Civil
Rights Act by dramatically undercounting minority audiences, causing
sharp declines in advertising rates and revenue for many broadcasters.
"This settlement ensures that California's diverse audiences will be
fully counted by Arbitron's ratings systems and that broadcasters
serving these communities will have the opportunity to compete fairly in
the marketplace," said Attorney General Harris. "I am pleased that
Arbitron will be revising its practices in the state and thank my
partners in this effort, City Attorneys Carmen Trutanich and Dennis
Herrera."
Arbitron's ratings are based on information provided by sample groups of
listeners. In deploying a new system that relied on electronic metering
devices in place of personal listenership diaries, Arbitron's listener
recruitment methodology failed to reflect the diversity of broadcast
audiences in California markets, according to the complaint filed in San
Francisco Superior Court.
The settlement mandates that Arbitron meet concrete metrics in its
efforts to ensure that its audience sampling methods are fair and
representative of California's diverse media markets. Specifically,
Arbitron will improve its sample-audience recruitment by increasing
address-based outreach to 65 percent of its total recruitment activity
by December 31, 2012. Previously, recruitment was conducted primarily
via land-line telephone, a survey method that failed to adequately
include minority households.
Arbitron will also take all reasonable steps to increase minority
participation in their sample audience panels in five California major
media markets. Additionally, Arbitron will begin incorporating country
of origin as a standard demographic characteristic collected from
participating Hispanic households-an additional benefit to
Spanish-language media outlets. The Columbia, Md.-based media research
firm also has agreed to pay a total of $400,000 to the plaintiffs:
$150,000 each to the State of California and City of Los Angeles and
$100,000 to the City and County of San Francisco.
Radio stations serving primarily African American and Latino audiences
were disproportionately affected by the sample audience recruitment
methods Arbitron began using with its switch to the PPM ratings scheme
in 2008. Of the 18 stations serving minority audiences in Los Angeles,
16 experienced ratings decreases in excess of 30 percent under the
initial PPM system. Three of these fell by over 70 percent.
One Los Angeles radio station, KJLH, whose audience is mostly
African-American, was rated 0.0 for a significant portion of the day
immediately after implementation of the new PPM ratings. One
Spanish-language radio station, KLVE, that had previously enjoyed a
number one ranking in the Los Angeles market saw its ratings plummet by
more than 50 percent under Arbitron's PPM ratings for September 2008.
Arbitron's PPM methodology was criticized by minority broadcasters and
the Media Ratings Council, the independent industry body that accredits
media ratings systems, which has found problems with minority
representation in Arbitron's sample audiences in the past.
"Through this settlement, Arbitron has agreed to take important steps to
ensure that minority radio stations are reasonably treated in order that
they may fairly compete in the California marketplace," said Los Angeles
City Attorney Carmen A. Trutanich. "In a city as diverse as Los Angeles,
it is important that all of our residents and our businesses be equally
represented and able to compete in our field of commerce. Only then will
all Californians have a voice."
"Assuring the integrity of broadcast rating methodologies is essential
to protect media outlets that serve California's diverse communities,"
said San Francisco City Attorney Dennis Herrera. "These measures set
all-important ad rates and revenue, and largely determine the success or
failure of media outlets in a competitive industry. I'm grateful for the
hard work and expertise of my co-counsel in this case, Attorney General
Kamala D. Harris and L.A. City Attorney Carmen Trutanich. I am also
appreciative to Arbitron and its legal team for their cooperative
approach and willingness to negotiate with us in good faith."
The case is the People of the State of California v. Arbitron, Inc., San
Francisco Superior Court.
A copy of the settlement is attached to the online version of this
release at www.oag.ca.gov.
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