Buyers: Nielsen-Arbitron faces big hurdles
They're concerned about anti-trust implications and pricing
December 19, 2012
The media world was abuzz this morning over the news that Nielsen is acquiring Arbitron, its sometime rival and sometime partner, in a deal worth more than $1.2 billion.
Media people were surprised that the two sides were able to keep the deal quiet as long as they did without any leaks.
But their astonishment quickly gave way to concerns about what such a deal will mean to media.
Buyers contacted by Media Life raised three main issues: Whether the deal will pass muster with anti-trust regulators, how the merger will affect Nielsen’s client pricing, and what new research and ratings the company will be able to offer.
Nielsen dislikes the term monopoly, but the reality is that there’s no competing source of TV ratings. The $65 billion TV ad market is based on Nielsen data, and though buyers have long supported efforts to launch viable competitors, none has succeeded in challenging Nielsen.
Even an Arbitron push to measure television ratings was aborted a few years ago.
The Justice Department will look into the deal because it combines the two biggest media ratings providers, Nielsen in TV and Arbitron largely on radio.
“I think if government regulators approve the acquisition there will probably be some restrictions,” says Brad Adgate, senior vice president of research at Horizon Media.
Scarborough Research is a joint venture between Nielsen and Arbitron. Analysts are already speculating that one of the antitrust requirements will be the divestment of the property, which collects data on newspaper audiences, among other things.
But a consolidated ratings service makes sense to some.
“The consolidation of rating services to reach across all media forms is an inevitable play for the bigger players like Nielsen,” says Paul Benjou, principal and founder at the Center for Media Management Strategies.
Media people generally dislike consolidation, because the lack of competition leads to slower development of and less incentive to produce new and better products.
Still, media buyers don’t foresee any huge protests surrounding the deal.
“I don’t believe there will be any [backlash],” Benjou says.
Buyers also are concerned that the near-monopoly on TV and radio ratings will lead to price increases for Nielsen clients, which they’ll be helpless to stop.
“A competitive marketplace with viable alternatives is almost always a good thing to have, especially when it comes to pricing,” says Bernie Shimkus, vice president at Harmelin Insight, the research arm at Harmelin Media.
The potential upside to the merger is the opportunity to develop truly cross-platform measurement that media people have been clamoring for for years.
Adgate says Nielsen has already announced plans to revamp the way it collects local TV market viewing, and Arbitron’s portable people meter technology could help with demographic viewing data collection.
“Ultimately we would hope that there would be improvement and efficiencies gained in the measurement within individual media, as well as across channels,” Shimkus says.
Tags: arbitron, arbitron nielsen, buyers, cross platform, media, media people, nielsen, nielsen acquiring arbitron, nielsen arbitron, nielsen arbitron antitrust, nielsen arbitron pricing, people, radio, ratings, research, tv
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