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FROM THIS EPISODE

This is Celia Hirschman with On the Beat for KCRW.

This story involves a billion-dollar device, a secret society of business executives, the Federal Communications Commission, and a little radio station housed in a basement.

We begin with Arbitron, the leading auditor of radio listenership. Their rating books determine advertising and underwriting rates. For decades, Arbitron collected information by sampling a population's listening habits through daily diaries. Each week, participants sent the diary to Arbitron for tabulation. After decades of diaries, Arbitron developed a new way to collect listening data. They created a small portable device, called a People Meter. The meter tabulated listeners' habits automatically. Arbitron rolled out People Meters in various cities around the country.

And here's where the secret society of executives come in. Every ratings company needs oversight and in Arbitron's case, the oversight comes from the Media Rating Council or MRC. The MRC is a group of executives of some of the biggest media conglomerates, who meet secretly behind closed doors to determine whether a ratings service deserves accreditation. They have accredited exactly two markets for the Arbitron People Meter; that is Houston, Texas and Riverside, California.

But Arbitron has already abandoned the diary system in favor of the People Meter in 13 of the biggest markets, including New York, Los Angeles, San Francisco, Philadelphia and Boston. This means the People Meter ratings have become the currency for advertising and underwriting in the biggest radio markets, regardless of whether the ratings are accurate.

And that's when the Federal Communications Commission got involved. As the FCC began hearings on the People Meter, a tug of war ensued with the Media Rating Council. The argument was over who gets the last word in deciding whether Arbitron's People Meter is fair.

Critics argue that the People Meter device is not accurate. Imagine waking up to your favorite morning jock on the radio. You get up, take a shower and make breakfast all while listening to the station. Just as you're walking out the door, you grab your People Meter from its cradle. Because it was recharging, nothing you listened to was tabulated. You better believe the majority of morning jocks are bemoaning this new rating system!

And consider the lifestyle implications of the new device. Arbitron requires participants wear the People Meter for two years, all day every day. That's not a realistic lifestyle choice for many individuals.

Enter KCRW. For over 20 years under the diary system, KCRW has ranked among the top public radio stations in the country. But not any more under the new people meters. Yet all other metrics place the station as a leader -- in numbers of members, money raised, hours streamed online, podcast downloads and traffic to its website -- all indicators of a very large listenership. Somehow the People Meter has missed all of this.

This begs the questions, on what basis has the MRC approved two markets for the People Meter and why haven't the inefficiencies of the device itself, called Arbitron's rating system into question?

In an era where the President of the United States is asking for greater corporate accountability and transparency, it's time for the FCC to discover exactly why the leading radio ratings system is so mismanaged.

This is Celia Hirschman with On the Beat for KCRW.

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