NDTV vs. TAM: From cost cutting to corruption...
A quick look at what led NDTV to file a $1.3 bn lawsuit against Nielsen, Kantar & TAM
Published - 06-August-2012
While NDTV’s decision to move a New York State court against TAM Media Research and its parent companies Nielsen and Kantar left the industry in shock, what created further uproar were the details mentioned in NDTV’s preliminary statement that point at corruption, leading to data manipulation, at the agency.
The Indian advertising and media industry is concerned but they are taking their time in accepting the 194-page statement at face value.
The key aspects that form part of this statement are as follows:
• The coming together of Nielsen and Kantar has created a monopoly, due to which NDTV, like other stakeholders, has had no choice but to rely on TAM Media Research data.
• Lack of funding by Nielsen, and one of the reasons attributed to this is cost avoidance measures to maintain revenues, has led to no investment towards increasing sample sizes to adequate levels. Another cost cutting method is to place the ‘Nielsen Process’ that is used to data gathering in markets, such as India, Philippines and Turkey, without making suitable adjustments for local conditions.
• That data is corrupted not just by lack of adequate sample size but also by lack of security.
• Nielsen and Kantar failed to follow their global standards and the basic tenets of corporate governance in India.
• NDTV has suffered the damages as a direct result of TAM’s separate and distinct acts and omissions.
• Low ratings for NDTV channels led to “loss of hard earned reputation along with damage to profitability due to low ad revenues”. This has damaged NDTV’s brand value and has led to a decline in NDTV’s share price from Rs 501 from January, 2008, to Rs 25.7 in December, 2011.
• NDTV’s battle with TAM over ratings had begun in 2004. When NDTV did not find TAM’s response satisfactory, it took the matter to David Calhoun, the worldwide CEO of Nielsen in January 2012.
• Following this Nielsen global representatives Paul Donato, EVP and Chief Research Officer, Nielsen, and Robert Messemer, Chief Security Officer, The Nielsen Company, travelled to India to meet NDTV in January 2012.
• Nielsen and Kantar took control of events then and promised NDTV to address its complaints.
• At a meeting that took place on January 20, 2012, NDTV arranged to have a presentation by a whistleblower/Consultant, who provides services to track happenings on the ground with TAM panel and panel homes. This was evidencing the modus operandi around the manipulation of TV ratings, involvement of TAM staff at various levels in the entire chain of illegal activity, specific instances of data manipulation by the consultants for certain channels.
• The whistleblower also gave details on how the he managed to get a TAM PeopleMeter installed at his residence, despite being a part of the TV industry, and leaking an existing list of 34 PeopleMeter homes in the city of Bangalore (PeopleMeter homes are to be confidential).
• The Consultant’s allegations relating to 34 homes were subsequently checked and verified to be correct by Nielsen’s Robert Messemer.
• The Consultant also shared a copy of a check for Rs 85,000 ($1,700) that he had received as payment for one month, from another consultant hired by a competing channel, for being empanelled as a TAM panel home to allow manipulation to take place from his own home.
• The Consultant explained that TAM’s sample size for ‘news’ was smaller, and as a consequence of this, news was an easier market for the consultants to work on, as fewer homes with PeopleMeters needed to be manipulated to make a significant impact. The Consultant pointed out that in the general entertainment segment, despite the sample size being larger than news, the sample is relatively small especially in relation to the large revenues generated by GECs, due to which corruption was rampant by channels and producers.
• Nielsen and Kantar have reported that, after a thorough investigation, the information provided by the Consultant was correct and that “he was very credible”.
• On February 27, 2012, Donato assured NDTV that Nielsen would conduct a study comprising 25 homes in Mumbai and 25 homes in Bangalore.
• On April 3, 2012, a meeting was held between the NDTV representatives and two field staff employees of TAM. The TAM employees revealed that they were employed in Mumbai to look after, and collect data from, TAM meters. They stated they were willing to manipulate TAM ratings in Mumbai...They said by paying a bribe of $250 to $500 per household per month, TAM households could be made to watch only those channels which they insisted upon.
• This meeting was viewed by an external surveillance agency, which took photographs of the employees. Those photographs were shown to Robert Messemer in New Delhi on April 27, 2012.
• On April 11, 2012, Donato reported Nielsen’s and Kantar’s findings after a 60-day study. Nielsen admitted the claims of NDTV, including the following systemic anomalies resulting in corrupt TAM data:
1) Over 50 per cent of the panel homes were unaware that their addresses and details ought to be confidential and they were supposed to report back to TAM in case anybody unknown contacted those panel homes.
2) The average age of a panel home was 2.7 years, which indicated no turnover at all.
3) The sample size of homes for measuring English news and business viewership was small.
4) About 48 per cent of the homes surveyed in Delhi and Mumbai (54 homes were surveyed) were outlier homes, that is, the viewership was abnormal and did not fit in with overall trends for the target audience.
• In the same meeting, according to NDTV’s statement, Eric Salama, Kantar’s global CEO questioned Messemer regarding the investigation. Messemer admitted that that there was a serious problem in TAM India. NDTV’s statement said, “He said, in the presence of about 15 people, that right through his professional career he has been called in to put out many ‘fires’ across the world for Nielsen, but so far he had never seen anything like this ‘absolutely shocking and unf*****g believable’ corruption at Nielsen and TAM in India.”
• The statement said that Salama apologised and assured NDTV officials that suitable action would be taken.
• The primary remedial measure required was the discontinuation of publication of data until there was an increase of sample size from 8,000 to 30,000 and immediately increased security measures. To date no such remedial measures have been taken.For more updates, subscribe to exchange4media's WhatsApp Channel- https://bit.ly/2QUdLCK