Judiciary Hearing Examines Minority Broadcaster Problems
Minority broadcasters’ financial difficulties came under scrutiny at a wide-ranging House Judiciary Committee hearing Thursday. Chairman John Conyers, D-Mich., expressed frustration that several witnesses who were invited to testify were unable to make the hearing, which addressed a range of issues including a divisive performance royalty bill (HR-848) the committee passed in May (CD May 14 p3), media ownership rules and Arbitron’s Portable People Meter that has been blamed for depressing minority stations’ ad revenue.
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Conyers said he wants the Government Accountability Office to study Arbitron’s survey methodology and the effect the data-gathering has had on radio ad revenue. “This committee is particularly concerned by the antitrust implications of Arbitron’s rating system,” Conyers said in his prepared statement. “The fact that one company so dominates the marketplace negates the market from offering alternative ratings schemes for advertisers and radio stations.” Conyers said he’s “preparing with other members” of the committee to ask GAO to conduct the study.
Arbitron defended its PPM as an “innovative” way to provide detailed and timely information on what people are listening to that “only electronic measurement can provide,” said CEO Michael Skarzynski. The company is willing to work with the radio industry to help broadcasters, especially those that are minority-owned, to survive the challenges of the declining ad revenue in the recession, Skarzynski said. He added that his company welcomes competition and does not create barriers to entry for other companies.
Minority broadcasters believe Arbitron “maintains a monopoly over the business of measuring the audiences of radio stations,” said James Winston, executive director of the National Association of Black Owned Broadcasters. Initial results from PPM measurements have shown such “huge rating declines” for minority stations that their financial future is at stake, Winston said. Declining radio revenue linked to use of the PPM devices prompted lawsuits in New Jersey and New York, with attorneys general accusing Arbitron of fraud, deceptive business practice and racial discrimination, he said. Those cases were settled, as well as one Maryland had threatened to bring, Winston said, saying “the settlements require Arbitron to make improvements in the PPM service.” The FCC has begun an inquiry to investigate PPM as well, he said. The House Oversight Committee also is investigating use of the devices (CD July 1 p9).
NABOB is not opposed to electronic measurement, Winston said. But the group thinks Arbitron has taken short cuts in rolling out a device that doesn’t produce accurate measurements. “The failure of Arbitron to obtain [Media Rating Council] accreditation in 13 of the 15 markets in which it is being used calls for investigation by this Committee,” Winston said.
The use of PPM technology “is a matter of legitimate concern for the FCC and this Committee,” said Media Access Project President Andrew Schwartzman. “The problem is more with the sampling techniques than with the technology itself,” he said. “While there is ample reason to be suspicious about the validity of ratings obtained using PPM, the best case scenario for PPM is that the new ratings are more reliable. That means that the diary-based system used for decades was a fraud,” Schwartzman said. “Either way, we need answers, and we may well need to regulate to ensure the integrity of the system.”
The FCC should look into the possibility of expanding PPM coverage to cellphones, which could help level the playing field, said Kendall Minter, chairman of the Rhythm & Blues Foundation. As for HR-848, Minter said the legislation is not the end of black radio. “It is the beginning of fairness for minority artists” and a relationship between creators of music and the stations that use their work.
The American Federation of Musicians of the United States and Canada (AFM) said in a statement it was disappointed that one invited witness, Radio One, declined to attend the hearing, calling the decision “irresponsible.” Radio One, which has run negative ads on many stations opposing HR-848, ducked the chance to speak before Congress on the issue, the group said. David Honig, executive director of the Minority Media and Telecommunications Council, said the group is hopeful that the Judiciary Committee will consider the views of a range of experts. Honig, who declined to testify at Thursday’s hearing, said his group has not been contacted by GAO on the study Conyers said he requested on the potential impact of the performance royalty bill on the industry.