Online Measurement. Arbitron Warns: "Be Careful."
As broadcasters continue to debate whether or not it makes financial sense for them to stream, they are also trying to figure out how they can get factual stats on the number of listeners tuning into those streams. Of course, the ultimate goal is presenting true numbers to advertisers to be able to monetize those numbers. Nobody is really debating that more listening is being done online and via mobile, the challenge is how to integrate those listeners into an easy-to-explain sellable presentation. Another goal is trying to determine whether or not pure plays like Pandora are presenting actual numbers as they try to achieve their stated goal, to steal your revenue.
Arbitron has been hinting they will be making an online measurement product available to stations at some point in the future. In the meantime they are trying to clarify, for stations, additional ratings data that has been flowing into the marketplace. Yesterday they warned stations to be careful about what gets used for online measurement especially when compared to the methodology used over-the-air. And although they were not specific it appears some of that warning was aimed at Pandora's monthly release where it claims to have huge numbers of listeners, comparing their audience to some of the most listened to radio stations in major markets. "Arbitron urges those reviewing audience estimates from Internet music services not to make direct comparisons to Arbitron audience estimates in any market." Despite the fact that the Pandora numbers are not for one specifically curated station, they market those numbers as if they are one station.
Charlie Sislen (pictured left) from The Research Director says, "Arbitron took a great step in clarifying the situation, because there are so many people running around making claims they cannot back up. You can talk about the internet and it's actuals and it not being estimates. Well, that's not true. They know they are streaming a signal. They don't know if there is someone on the other end listening. There is a big difference between a third party who is judging you, and you judging yourself. I think that's critical."
For example, Edison Research "examines" how many listeners tune into Pandora, how long each person listened and then converts that data into Average Quarter Hour metrics using industry-accepted methodology for Metro Survey Areas. In order to qualify as a listener, a person had to listen for at least five minutes within a quarter hour period. Yesterday's Arbitron letter to stations says, "To our knowledge, many Internet music channels simply indicate that a session started. There appears to be no way of confirming if anyone is on the other end throughout the session. Recent releases of audience estimates for Internet music services have raised a number of questions about the comparability of Arbitron’s survey-based PPM radio audience estimates to estimates derived from server log files." Arbitron says the estimates should not be considered equivalent to Arbitron audience estimates."
Arbitron also wants stations to understand the methodoly it uses over the air should not easily be applied online. "Some Internet music services are using the traditional radio audience metrics of average quarter-hour (AQH) and Cume. To date, these metrics have only been applied to “one-to-many” curated broadcast stations, which then can be aggregated to create combinations of stations. AQH and Cume estimates, whether produced by Arbitron or other measurement services, historically have been subject to minimum reporting standards limiting the number of stations that are reported in any individual market, even though some listening occurs to small local or out-of-market stations.
Sislen adds a point to the discussion that others such as Mary Beth Garber at katz have consistenly been making. "Whenever an internet audio company says "we would be the number one station in the market," or whatever their share would be, you have to compare yourself to the entire radio market. If your numbers are right, you are not comparing yourself to a single station. For example, Satellite is not one channel. It's 160 channels."
Tuesday afternoon update
The research Pandora pushes out is produced by Edison research. Tom Webster posted this blog in response to what has been going on. It's called "Setting The Record Straight on Pandora."
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