Arbitron CEO Steve Morris isn’t writing off doing business with Cumulus Media in markets 100+, saying small market broadcasters want a mix of audience measurement products and Arbitron is discussing options with them. Arbitron’s Q1 revenues were up 5.5% to $94.1 million in Q1 and, despite the difficult economic environment, the company is sticking with a full-year growth estimate of 8-10% as the PPM rollout gets back in gear. And while the company’s radio clients are facing financial challenges, Morris insisted that the basic radio business still remains healthy.
Rather than wait for an analyst to ask about the Cumulus RFP, Morris tackled it head-on in his opening comments. He said it was no surprise and that Arbitron had been hearing from other small market broadcasters, not just Cumulus, who want “a different mix of information to serve what is, in fact, quite a different business.” He noted that Arbitron has already added qualitative questions to the back pages of its small market diaries and that Scarborough, jointly owned with Nielsen, is expanding its qualitative research to more markets. But he insisted there is still value in AQH ratings in small markets to attract national ad spending, even though that is a smaller portion of total revenues than in large markets. “We believe that we can, and will, be able to offer an array of options in additional markets and customers can choose from them to provide them with what they need to best position their stations and maximize all of their revenue opportunities,” Morris said. In Q&A he made it clear that regardless of what happens with the RFP, Arbitron is not losing Cumulus as a client, since the company will continue to subscribe to diary or PPM service in its markets through number 100 and is already a PPM subscriber in Houston.
Morris told analysts that the Portable People Meter has hit virtually all of its benchmarks, with the exception of a couple in the Nassau-Suffolk market. And he cited a lack of recent strong public statements against PPM by broadcasters. So, is he confident now of going ahead with the PPM rollout? “Oh, absolutely,” Morris replied to the analyst’s question.
RBR/TVBR observation: It seems that Arbitron is playing “good cop – bad cop” with the Cumulus RFP, with Pierre Bouvard disparaging it by insinuating that it will fall apart like the Clear Channel-led RFP for electronic measurement, while Steve Morris is talking about how Arbitron can provide the kind of service that Cumulus is looking for – and hold onto that eight million bucks of annual revenue!
How important are those markets above 100? Morris said they account for about 20% of Arbitron’s revenues. Of course, that’s not just from Cumulus, but from many, many station owners.