Last week New Delhi Television (NDTV) filed a suit in New York against Nielsen Holdings and its affiliate companies for over $1.3 billion in damages. The law suit claimed that the global research firm had fudged television viewership data. Its contention: Nielsen’s refusal to invest in its Indian arm, TAM Media Research, and the corruption that led to manipulation of viewership data in favour of some television channels had caused a loss of revenue for NDTV. The lawsuit brings out into the open what the industry has discussed and dismissed for years — that the sample size for the ratings measurement is very small and that the process lends itself to corruption. It also emphatically reveals that the Rs 33,000-crore Indian television industry has not been proactive on issues that matter for its long-term health. One such is the ratings system; a TV rating is a time-weighted average of the total time that people in sample homes spend watching a certain show. Through the 1980s, India had a diary system for measuring ratings. This was replaced by electronic monitoring in the 1990s. In 2002, the two main agencies with competing technologies, INTAM and TAM, merged. TAM is empanelled by a Joint Industry Body, which comprises broadcasters, media buyers and advertisers. TAM is a joint venture between AC Nielsen Research Services and WPP-owned Kantar Market Research.
Ratings, just like readership numbers for newspapers, are a critical currency. Broadcasters use them to monitor their own performance and to determine channels, genres and markets in which to invest. Advertisers use them to figure out where to advertise. So, besides the new investment coming in, about Rs 11,600 crore – the amount spent on TV advertising in 2011 – is at stake with TAM ratings in question. For years there have been complaints about the sample size — over 8,150 metres, or about 36,000 people. This is huge by the standards of other markets but not robust enough for India, say advertisers and broadcasters. They reckon, rightly, that it does not capture the heterogeneity of the market. TAM’s response: pay more and it will increase the sample.
Unfortunately, given the amount of money riding on this, the industry and its various arms have not made an effort to figure a way out. It is, thus, eminently possible that broadcasters who were pressured to deliver ratings, improve valuation or meet market expectations of audience share probably found the easy way out — and started fixing the ratings. Eventually, the government noticed. In 2008 the Telecom Regulatory Authority of India, or Trai, brought out a paper on ratings policy. Last year a committee led by Amit Mitra released a report titled “Review of Existing Television Rating System in India”. It had some ominous recommendations such as making the alternative, the Broadcast Audience Research Council (BARC), a non-profit body or having a committee of specialists that would overlook BARC’s work. After more than a decade of inaction, one company has finally gone legal. Will industry organisations now work towards creating a more robust system so that future advertisement revenues are protected? Or will the sector wait for a state-mandated solution in a private, industry matter?