Arbitron had previously said that the defections of Cumulus Media and Clear Channel Radio to Nielsen’s new radio ratings service in smaller markets would cost it $5 million in 2009 revenues. Now it has spelled out in an SEC filing what the revenue impact will be going forward.
“Nielsen’s signing of Cumulus Media Inc. (“Cumulus”) and Clear Channel Communications, Inc. (“Clear Channel”) as customers for its radio ratings service in certain small to mid-sized markets was a primary factor in a $4.6 million decline in our revenue for the nine months ended September 30, 2009 and is anticipated to adversely impact our expected revenue by approximately $5.0 million for all of 2009, and $10.0 million per year thereafter. Due to the impact of the current economic downturn on anticipated sales of discretionary services and renewals of agreements to provide ratings services, as well as the high penetration of our current services in the radio station business, we expect that our future annual organic rate of revenue growth from our quantitative Diary-based radio ratings services will be slower than historical trends,” Arbitron said in its quarterly 10-Q filed with the SEC. The document included the financial results reported last month, but also provided more detail (along with lots of legal boiler plate required by the government).
The filing didn’t reveal anything new about Arbitron’s ongoing efforts to win Media Rating Council (MRC) accreditation for its Portable People Meter (PPM) radio ratings service, which is now in 25 markets – only two of which have MRC accreditation. Those, of course, are Houston-Galveston, which was accredited in January 2007, but uses a more expensive address-based recruitment system than the phone recruitment system used in all other markets, and Riverside-San Bernardino, CA, which was accredited in January 2009.
The MRC denied accreditation for Philadelphia and New York, along with the embedded Nassau-Suffolk, NY and Middlesex-Somerset-Union, NJ markets, in January 2008. They were re-audited in 2008, but remain unaccredited. “Among other things, the MRC identified response rates, compliance rates, and differential compliance rates as concerns it had with the PPM service in these local markets,” Arbitron told the SEC.
All other markets have also been audited, but the MRC has neither granted nor denied accreditation yet for those 19 markets.