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Hogan trying to put positive spin on PPM conflict

There's still no word on whether Clear Channel will invite CBS Radio, Emmis, Bonneville and such back to participation in its Next-Generation Electronics Ratings Evaluation Team, but CC Radio CEO John Hogan is trying to explain why his company was in talks to do the same thing they did - sign a contract for Arbitron's Portable People Meter (PPM) before the Next-Gen group completes its evaluation of PPM and a rival system from The Media Audit/Ipsos. According to a memo that Hogan sent out to CC Radio execs, a copy of which was obtained by RBR, Hogan confirmed our report that his company had been in talks with Arbitron for PPM, but ended them last week after PPM failed to win Media Rating Council (MRC) accreditation in time for a Houston launch which had been planned for next month (6/23/06 RBR #123). With there no longer being a possibility that PPM would become Arbitron's ratings currency in Houston right away, he said there was no need to continue negotiations. In his memo, Hogan took issue with Arbitron's claim that PPM is ready to go. "Well, there are a lot of people who disagree with them, including the MRC and at least two major radio groups that would not even participate in the Houston trial. And even if their technology were ready - which we don't agree it is - this decision is not being based just on whether a gadget functions. It's about the relationship the industry will have with the chosen vendor; it's about the ability to deliver accurate and timely measurements; it's about the ability to deliver rapid ratings; and there are many, many more crucial criteria on the list," Hogan told CC Radio managers. He also denied that the whole RFP process with the Next-Gen group was just a negotiating tactic for Clear Channel to reduce the price it has to pay for PPM. "Our industry is looking at alternatives because Arbitron has been unsuccessful. We want accurate, timely, cost-effective audience measurement and we want it now - and we're not going to be forced to settle for something that's inaccurate, untimely and prohibitively expensive. We're just not," Hogan wrote.

Read the entire Hogan memo.


Good Afternoon:

On Monday, we suspended negotiations with Arbitron regarding licensing the PPM. With the MRC's decision not to accredit Arbitron in Houston, there's no point in continuing discussions. It remains to be seen if they can achieve accreditation before The Media Audit, Nielsen, and even possibly MRI - there's no way to know. Our decision does not impact our commitment to the Evaluation Team -- we will continue to consider Arbitron as a contender despite their setback with the MRC. So you could potentially get another round of questions this week about our official position on Arbitron's PPM. Below is our official position on a number of questions you may receive. While we don't want a lot of people inside the company acting as spokespeople on this topic, it is important for everyone on this distribution to be aware of the official position should you be asked by customers or key staff. We want to remain consistent in our responses so there is no ambiguity about where we stand. If you have any questions, please don't hesitate to call. If you get any media inquiries about Clear Channel Radio's thoughts about PPM, please direct them to Sanda.

John Hogan

* * * FOR INTERNAL USE ONLY * * *

Q: Is it true that Clear Channel has suspended negotiations with Arbitron about licensing PPM?

A: Yes. We believed that the PPM would receive MRC accreditation on June 9th for the market and were discussing potential options with Arbitron. Given that they do not have MRC accreditation, there is no need for either side to continue talking until such time as they have MRC accreditation. Clearly, that accreditation for is not in sight in the near future.

Q: What about these rumors that Arbitron will now abandon the rollout and focus on some other market -- because they only promised MRC accreditation for Houston?

A: We think it's doubletalk. It makes no sense that accreditation is crucial for one market and not for another.

Q: What do we say to claims that Clear Channel is out of step with the industry because it hasn't signed with Arbitron for PPM?

A: We'd say that we're the ones who are in step with or more accurately leading the industry. We agree with both the MRC and the 20+-member, cross-industry evaluation team -- and especially with Cox and Cumulus and Entercom and Radio One and many, many other radio companies -- that PPM is not ready for prime time. The companies who have signed on to PPM represent 252 stations ... out of more than 13,000 in the U.S. The scope of the radio companies that continue to stand with the MRC and the Evaluation Team dwarfs those who have decided to exit the consideration of alternatives.

Q: Is all of this just an elaborate negotiating ploy by Clear Channel to get the price of PPM down?

A: I am not clever enough to have designed such a complex scheme, and no, it is not a negotiating ploy. ... Clear Channel signed a long-term contract with Arbitron before we issued our RFP and we've supported both PPM trials. We've been nothing but supportive of Arbitron's attempts to field electronic audience measurement. The fact that they have not yet been successful in getting MRC accreditation, or more than a small fraction of the industry to support them, has nothing to do with us.

Our industry is looking at alternatives because Arbitron has been unsuccessful. We want accurate, timely, cost-effective audience measurement and we want it now -- and we're not going to be forced to settle for something that's inaccurate, untimely and prohibitively expensive. We're just not.

Q: But Arbitron says PPM is ready to go...

A: Well, there are a lot of people who disagree with them, including the MRC and at least two major radio groups that would not even participate in the Houston trial. And even if their technology were ready - which we don't agree it is - this decision is not being based just on whether a gadget functions. It's about the relationship the industry will have with the chosen vendor; it's about the ability to deliver accurate and timely measurements; it's about the ability to deliver rapid ratings; and there are many, many more crucial criteria on the list. Radio is the most effective medium on the planet - we deserve an audience-measurement system that shows our full reach and effectiveness.

Q: What about the agencies who have signed on to PPM?

A: Yes, there are some agencies who have signed up for PPM, but those are not exclusive agreements for audience measurement. What they really want is electronic measurement. We agree that electronic measurement is crucial. But let's be clear: It's the radio broadcasters who have to encode their signals for PPM to work. It's the radio broadcasters who shoulder the lion's share of the subscription costs. So let's try to keep our eye on the ball here.

Q: Arbitron keeps pointing to the amount of time they've spent developing PPM - doesn't that sway you?

A: Actually, it deters us. They have spent an enormous amount of time and they're still not ready... and they are seemingly reluctant to look at all of the important criteria that the Evaluation Team has laid out.




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