This is Celia Hirschman with On the Beat for KCRW.
The big news in the music industry this week came from Arbitron. Arbitron is the ratings service that measures the listening audience of commercial and non-commercial radio.
For decades, Arbitron had determined ratings, using a diary system for listeners. A random sample of the population, age 12 and over, were asked by telephone if they would keep a written diary of their listening habits for one week. At the end of the week, the completed diaries were returned to Arbitron for tabulation. New volunteers were randomly chosen to track their listening habits the following week to complete new diaries. Arbitron published their findings on a quarterly basis in a ratings "book." The book largely determines the financial health of local radio stations – from their economic value in the market, to their advertising revenue potential.
This traditional system of measurement has always been fraught with problems. Compliance of the diary system can be inconsistent, especially with younger listeners. Still, the ratings system has been the gold standard for radio stations and advertisers for over 40 years.
With pressure mounting for Arbitron to move to a digital and less subjective metering system, the company developed the People Meter. The People Meter is a small electronic device that detects radio stations' unique electronically embedded codes, which are undetectable to the naked ear. Volunteers wear the devices somewhere on their person at least five hours a day. Every evening, while the device is recharging its battery, the listening habits of the volunteer are downloaded by phone lines to the Arbitron home office for tabulation. Arbitron has been working on the new monitoring system for over ten years.
This past Monday, Arbitron delayed the wide roll out of the People Meter auditing system. They had planned to launch the system in December in nine major media markets, including New York City, Los Angeles, Chicago and San Francisco. But earlier this year, the company audited stations in Philadelphia and Houston with People Meters and traditional diary systems.
When the results of those tests were revealed, many in the business were outraged. The auditing results were vastly different results for each monitoring system.
The crux of the debate lies in the methodology of how listeners' habits are audited with the new People Meter. For example, how many actually wear their People Meter at least five hours a day. Also, the old diary system required only a one-week commitment, but the People Meter keeps participants wearing the device, for up to two years. Though they can cycle out of tabulation due to lack of compliance, obviously this is big concern. Why would anyone want to wear a device every day for that long a period? Arbitron won't divulge how much participants are paid to wear the People Meter, but they do say that money is not the primary incentive; that panelists cooperate to have a "voice" in the way radio is programmed. And then there's a question about the metering itself.
People Meters will not recognize radio if the participant listens on headphones, as many people at work do. Without an audible signal, the device cannot detect a radio station.
The concept of a digital measurement system is definitely needed and certainly overdue. Now, if someone can get those braniacs at Berkeley to devise a realistic statistical model, taking lifestyle into consideration, radio and advertising could get back to work.
Otherwise, Arbitron can bank on some very difficult years ahead.
This is Celia Hirschman with On the Beat for KCRW.