erinMedia and ReacTV File Antitrust Lawsuit Against Nielsen Media Research

erinMedia and ReacTV File Antitrust Lawsuit Against Nielsen Media Research

Landmark Suit Seeks to Break Up Longtime Nielsen Monopoly and Facilitate Use of More Accurate TV Ratings Methodologies

ST. PETERSBURG, Fla., June 16 /PRNewswire-FirstCall/ -- Television ratings provider erinMedia and "reactive" television network ReacTV today announced a landmark antitrust lawsuit in U.S. District Court against Nielsen Media Research, a subsidiary of VNU, based in the Netherlands. The plaintiffs contend that Nielsen's monopoly over television ratings has resulted in a distorted view of what millions of Americans are watching and deprives them of a voice in determining what programming stays on the nation's airwaves.

The suit seeks to end Nielsen's monopoly over television ratings research by, among other things, voiding Nielsen's staggered long-term contracts with TV networks and other customers and allowing these customers to take advantage of new interactive set-top box technologies that supersede Nielsen's outmoded sampling methods and allow for the counting of every viewer.

"TV networks, advertisers and the American public are all poorly served by Nielsen's antiquated methods," said Frank Maggio, Chairman and Chief Executive Officer of erinMedia and Founder and Chief Executive Officer of ReacTV.

"The American television industry represents not only $60 billion in advertising dollars, but is a $250 billion business that serves 109 million households," Maggio continued. "Yet today, when service operators can easily capture viewer preferences in a privacy-protected manner, Nielsen still relies on only 7800 of those households to produce national ratings. We believe that the ratings market needs to be opened up to new methods that allow the use of data from every television, every second of every day."

Maggio cited the negative effects of Nielsen's monopoly, including wasted advertising dollars, the cancellation of undercounted TV shows, the under- representation of minority viewers, and the homogenization of American television programming.

"It is commonly known that an estimated 10 to 30 percent of TV advertising is wasted, because Nielsen's inaccurate ratings do not allow effective targeting of viewers who might actually buy the advertisers' products," Maggio said. "That's $6 billion to $18 billion in wasted ad expenditures that add to the cost of consumer products. And until we take advantage of universal data capture from digital set-top boxes, minorities and other viewers will continue to be miscounted, and many of viewers' favorite programs will continue to be cancelled. That's not just monopolistic - it's anti-democratic."

Set-top data can be gathered today from the 25 million U.S. households that have advanced set top boxes, Maggio noted. As analog cable and satellite subscribers migrate to these two way boxes, the potential exists to count the votes of more than 85 million households.

"Nielsen's methods largely rely on the self-reported viewing habits of a small sample of recruited and coached viewers," Maggio said. "The resulting ratings are presented as fact and do not include error estimates or confidence intervals.

"The other recent alternative is Arbitron's Orwellian Personal People Meters, which are clipped on people's clothing and measure a person's behavior every hour of every day. Neither is acceptable in our society. It's time to use the digital technology we have today to capture channel changes on a second-by-second, privacy-protected basis."

erinMedia's methods, in contrast to Nielsen's, use the data captured from digital set-top boxes, of the kind increasingly used by cable and satellite TV networks, to measure second-by-second the choices of every viewer. Individual's personal information is barred from access by erinMedia and the viewing data is captured by the service provider. Demographics are appended to the summarized data using sophisticated mathematical analysis obtained from a second source.

"Nielsen has control over every aspect of the ratings process, from data sampling to data collection to data analysis," Maggio said. "That allows too much influence and control by a single entity, and the potential for data manipulation by the highest bidder. What America needs instead is a system in which TV networks control access to their customers, a second company captures the data through set-top boxes, and a third company analyzes it."

The suit specifically requests, among other things, that the Court award injunctive relief to end Nielsen's unlawful monopolization; that all of Nielsen's long-term, staggered contracts immediately become invalidated; and that Nielsen be denied the ability to continue anticompetitive practices such as purchasing its competitors.

"The American way is about innovations that let people express their individual preferences," Maggio said. "We don't want to replace Nielsen. There is plenty of room for two players or more. What we do want is a level playing field that allows us and any other players to take advantage of digital technology to reflect the preferences of 25 million people or more as inclusively as possible."

For more information about this lawsuit, please visit http://www.weshouldallcount.com/.

About erinMedia:

erinMedia, LLC, is a privately-held media research company focused on understanding television audience behavior in all its forms - cable, broadcast, satellite, linear, non-linear, and interactive. erinMedia's methodology combines privacy-compliant tuning data collected from advanced set-top boxes with independently gathered demographic data to produce insights into audience composition and viewing behavior. With over 135 patent-pending claims, erinMedia's proprietary technology produces accurate and timely analysis without the use of personally identifiable information. erinMedia brings experience and expertise in mathematical analysis, statistical modeling, and software development to the science of television audience research. For more information, please visit http://www.erinmedia.net/ or call 941.739.4500. erinMedia is an entity of The Frank Maggio Companies. For more information on The Frank Maggio Companies, please visit http://www.frankmaggio.com/.

About ReacTV:

ReacTV is the America's first creative media production company to develop reactive television programming. ReacTV's patented technology enables interactive gaming networks, where viewers at home compete for prizes, simply by watching and reacting to their TVs. ReacTV has exclusively licensed the patented CRAV Reactive Ad System, which allows mass media broadcasters, publishers and sponsors to create a new level of consumer awareness through reactive advertising. ReacTV is owned and founded by new media and real estate magnate Frank Maggio. For more information, please visit http://www.reactv.com/ or call 727.828.3688.

Source: ReacTV; erinMedia

CONTACT: Kristin Celauro: +1-212-850-5652, or Harlan Loeb:
+1-312-861-4703

Web site: http://www.erinmedia.net/
http://www.reactv.com/
http://www.weshouldallcount.com/
http://www.frankmaggio.com/

-------
Profile: intent