Nielsen, the TV ratings company, is being sued by Indian television company NDTV (New Delhi television) for allegedly “consciously, recklessly and intentionally” harming the network by fixing ratings.Audience numbers in India can be changed in exchange for bribes, the suit alleges.
NDTV filed a 194-page lawsuit against Nielsen on July 25, 2012, in state court in New York. It accuses the Television Audience Measurement (TAM) system that measures viewership in India, a joint venture created between Nielsen and Kantar (a competitor), of corruption, greed, and bribery, and claims the practices that have resulted in millions of losses for NDTV.
Nielsen did not immediately respond to a request for comment.
The most damaging assertion is that they claim both Nielsen and Kantar admitted a manipulation in the collection and dissemination of TAM viewer numbers but did nothing to resolve the issue.
The network blames Nielsen, claiming the company’s owners are cutting costs.
Nielsen is owned by a group of private-equity firms including KKR, The Blackstone Group, The Carlyle Group, Thomas H. Lee Partners, Alpinvest Partners, Hellman & Friedman and Centerview Partners.The suit claims these firms are executing an “exit strategy” out of the Nielsen business and, as a result, have made Nielsen take cost-cutting and cost-avoidance measures to maintain their share price.
This in turn, the suit says, has led them to disregard the company’s responsibilities to its customers resulting in manipulation of numbers over the last eight years.
Since 2004, NDTV says it noted its suspicions to TAM that Nielsen’s reports were inaccurate. Among the instances, NDTV alleges, was a November 2004 spike in English news channel viewership from 50,000 to 200,000 during a four-hour span despite no new programming or special event.
This year, NDTV brought evidence of manipulation to Nielsen during meetings in January, claiming losses to the network which amount to more than $1.5 million since January 2012. NDTV says other losses (including pay to TAM for reports, loss in advertising revenue, increased carriage costs with cable operators, loss of good will, loss of reputation in the television industry, and more) amount to $125 million.
The main issue stems from the number of households data is being drawn from, which NDTV says is too small to be accurate. NDTV claims samples are being collected from only 8,000 households.
Bribes allegedly requested
The suit also cites bribery uncovered within TAM. On April 3, 2012, NDTV claims representatives met with two field staff employees of TAM who revealed they were able to manipulate TAM ratings in Mumbai by offering bribes to channels, the suit claims:
“They stated they had direct access to homes and visited those homes periodically (at least 3 to 4 times a week) and were in a position to easily influence what the households watched/viewed. They said by paying a bribe of US$250 to US$500 per household per month, the TAM households could be made to watch only those channels which they insisted upon.”
The TAM members allegedly told the NDTV reps they could triple their ratings in Mumbai in two to three weeks if they wanted.
As a remedy, NDTV suggested increasing the sample size to 30,000, something the suit claims Nielsen agreed upon but never followed through on.
In an email dated May 16, from TAM India director Thomas Puliyel to NDTV, Puliyel suggested there was an “integrity” problem at TAM:
In my letter of May 1, I had mentioned that there have been attempts to influence TAM panel integrity. We are putting into place many security measures to prevent the data from being vitiated.
NDTV also claims India is not the only place feeling the effects of inaccurate ratings. It cites Florida, Turkey, and the Philippines among those also complaining about inaccurate ratings from small sample sizes.
A Nielsen spokesperson told us it is “policy to not comment on pending legal matters.”
You can read the suit, HERE.
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