Next month is the National Association of Broadcasters’ annual radio convention, to be held in Atlanta. I wish I could be a fly on the wall in some select panels and the local off-hours watering-holes. Fireworks are expected over an issue that’s been feistily percolating for more than a year — the integrity of the U.S. radio ratings system.
First, a quick primer about radio ratings in the United States. Administered by Nielsen, the ratings are collected by two primary means: listener diaries and Portable People Meters (PPM). The PPM system is a small pager-like device that selected listeners carry around with them; when exposed to a station’s broadcast, the meter logs the station and time spent listening. How? Stations that subscribe to the Nielsen ratings in PPM-enabled markets broadcast a special audio watermark that is inaudible to listeners, but that PPM devices can hear. The watermark is a 1000-3000 Hz tone; as a proprietary technology, the only way to work out how it really operates is by observing it in the wild or by examining its patents.
When the PPM system was introduced in 2007, it was touted as a new era for measuring radio ratings because listeners aren’t all that great about accurately and meticulously recording all the stations they’re exposed to. For example, radio often functions as background noise in places like restaurants, stores, and offices; when you’re at the dentist are you really paying attention to the smooth/lite pabulum oozing from the waiting room ceiling? Today, four dozen markets are measured using PPM technology.
Over the years, there’s been criticism of the PPM system – how valid its metrics are, how it might be misused or abused — but by and large the radio industry bought into the technology as a net improvement to the integrity of ratings data. But now there’s growing concern about that integrity, thanks to a special box of electronics called Voltair.
A product of the Telos Alliance, Voltair works by juicing the broadcast of the PPM watermark, making it easier for PPM devices to pick up. When the product was announced last year, it created quite a buzz — but no broadcaster would admit to actually owning one, and close to 600 have been sold since its unveiling. For more than a year now, the spectre of a $15,000 “secret” weapon has plagued broadcasters, casting doubt on the integrity of their ratings, especially among those who haven’t bought a magic box of their own.
Things have not been helped by the fact that Neilsen has dodged the controversy, lending credence to the notion that perhaps PPM data can be manipulated by third-party technology — which in turn heightens systemic uncertainty in the ratings themselves. In the highly competitive advertising industry, not having solid numbers can translate into real losses of revenue.
This uncertainty began reaching anxiety levels when a data journalist crunched the numbers earlier this summer to argue that deficiencies in the PPM system may have played a factor in the death of the smooth-jazz format on FM. Had an entire industry decimated an entire format based on bad ratings data?
I can feel for Nielsen’s predicament here. If it disparages Voltair or threatens to penalize stations that use it, that would undoubtedly trigger nasty legal action from Telos on restraint of trade and other grounds. But if it acknowledges that Voltair does have an effect on PPM reception, then it’s effectively admitting that there are flaws in its system. In July, the company hosted a webinar in which it split the baby: it strongly discouraged stations from using Voltair and announced it was testing the technology’s effect on PPM encoding and reception.
While Nielsen warned that amplifying the PPM watermark may make it audible to listeners, ultimately degrading their time spent with the station, it also announced that it was working on improvements to its encoding techology which would improve PPM watermark reception. Its own sampling of Voltair-enabled station ratings showed no statistically significant increase due to the box’s presence in the airchain.
Nielsen’s response satisfied nobody, and in some respects only exacerbated the tensions. At next month’s NAB Radio Show, the two sides will hold separate panel sessions, expected to add fuel to this controversy.
The PPM/Voltair situation is both amusing and sad, for pretty much the same reasons. The contemporary U.S. broadcast industry is facing significant pressures from new techologies and the financial markets. Time spent listening to radio has been declining for the last 20+ years, especially in younger demographics. This trend has been amplified by the explosion in new audio delivery services such as streaming, podcasting, and the like. Broadcasters have taken a fragmentary approach to dealing with digitalization, from adopting a digital broadcast system to securing space on mobile media platforms such as smartphones.
Meanwhile, Wall Street demands to be fed. The largest players in the radio business are publicly-traded companies, such as iHeartMedia, Cumulus, and CBS. The first two are massively overleveraged, juggling billions (and, in iHeartMedia’s case, tens of billions) of dollars in debt. So much so, in fact, that both iHeart and Cumulus have sold off key portions of their transmission infrastructure (tower sites) just to make the interest payments on their debt. 20 years of conslidation and cost-cutting to appease shareholders has decimated radio’s ability to differentiate itself and create compelling content.
Instead of dealing with these realities, the industry would rather navel-gaze about ratings manipulation. This is so because the dominant industry paradigm considers radio’s ratings, in the aggregate, to be a convenient shield from the world changing around them. The broadcast industry is quick to tout its reach: more than 90% of Americans are exposed to radio broadcasts at least once a week. As a platform, this number is unparalleled, and broadcasters are quick to dispute any statistics that might say otherwise.
But long gone are the days when measures of reach defined the power of a media platform — in the hyper-saturated, multi-platform media world of today, the name of the game is engagement. Think about advertising: the average American is exposed to thousands of advertising messages in a given day. In simple terms, while these messages reached your eyes and/or ears, how many of them do you actually remember? And of those, how many shift your consumption behavior? As an industry built on the legacy model of one-to-many communication, radio struggles mightily with how to increase listener engagement and, like with digitalization, the approach is fragmentary and variably-defined.
Ultimately, the Voltair controversy reminds me of a kerfluffle currently raging here in New York City. The nation’s #1 metroplex has plenty of critical issues facing it: income inequality, gentrification and the decimation of affordable housing, police brutality, the crumbling of infrastructure and public education. But the ruling class is captivated by a need to do something about the proliferation of free-range titties in Times Square.
Talk about missing the forest for the trees. Last year I found the NAB Radio Show to be an insular affair dominated by cheerleaders. I suspect it’ll be more of the same this year, but at least both sides of a controversial industry issue are being given microphones.
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