Sunday, November 27, 2005

ErinMedia v. Nielsen Media Research: email dirt?

A judge recently denied Nielsen Media Research' motion to dismiss a case brought forward by erinMedia. This means, we can expect the case to actually go to court.

NMR kind of holds a monopoly on TV ratings in the US, much to the frustration of a number of different interested parties. A settlement doesn't seem likely at this point, as the parties are to entrenched to back out now.

Let's try to figure out where this is going.

First, NMR has wide industry support and its ratings are the de facto currency for the US TV market. At the same time, its monopoly position is constantly attacked, from the sector's regulatory body (Media Rating Council), from the News Corp supported Don't Count Us Out group and from politics, where bills for regulatory oversight are pending. Adding these two (support and attacks) suggests that this is a disputed but accepted monopoly. It's not perfect, but it's the best there is.

Second, erinMedia claims its method is by far superior to NMR's. ErinMedia plans to use set-top box data (from potentially 60% of the population), while NMR uses a sample of households (8k). In other words: erinMedia uses to the full population of a large subset (40% of households don't have a set-top box, as they watch through an arial or through analogue cable), whereas NMR measures the habits of a representative (or so it claims) sample of the entire population. Doesn't seem to be stuff for a judge to decide.

Third, erinMedia claims to seriously want to enter the market. However, it doesn't have a deal yet with a dataprovider (cable or satellite company) or a potential buyer (broadcaster or advertising agency). Or can erinMedia come up with some email, proving that Comcast really would like to do business with them, but unfortunately they are restricted by their NMR contract? Also, erinMedia needs to show that NMR expressly worked on preventing erinMedia from entering the market. Again, this seems to require some kind of email message or so.

Fourth, erinMedia needs to prove abuse of the monopoly position NMR has. NMR supposedly bought (potential) competitors, lured clients into extremely long contracts and used predatory pricing. This seems a tough point to make, as both antitrust authorities and clients aren't clearly protesting.

Fifth, NMR's stranglehold on the market supposedly stifled innovation. However, if we look at two of the most important innovative features (DVR and VoD), the facts seems not to favor erinMedia. NMR is rolling out DVR-measurement and VoD is actually taking off.

Conclusion: erinMedia has a tough case, but we are looking forward to any Balmereske email ('we're gonna f** bury these guys').

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