Trade shocked as NDTV sues Nielsen,Kantar,TAM & others

01 Aug,2012

By A Correspondent

 

New Delhi Television Ltd (NDTV) has sued The Nielsen Co, a global research and information firm, and its partner Kantar Media Research in a New York court for tampering with TV viewership data to favour broadcasters who allegedly bribed executives in its Indian JV, TAM India.

 

In an unprecedented action, the Indian television producer and broadcaster, NDTV, which owns the news channels NDTV 24×7 and NDTV India, has filed a suit in the New York State Supreme Court seeking damages of around $1.4 billion for negligence and fraud and hundreds of millions more for interference and breach of fiduciary duty. Advertisers and media agencies depend on TAM data – the only available measurement for TV viewership – to negotiate ad rates.

 

In its 194-page lawsuit, NDTV claims that it had confronted Nielsen with evidence of data manipulation, including taped meetings with TAM India employees, which showed that they were willing to tamper data for bribes. Nielsen, according to NDTV, had admitted in meetings and through emails that its data was indeed being manipulated and that it was willing to address the issue by July 1, 2012.

 

NDTV says that Nielsen continued to publish these ratings despite repeated demands to stop distribution of TAM TV ratings until the sample size was increased and a proper security mechanism was put in place.

 

The broadcaster has charged Nielsen and Kantar with “operating worldwide through a deliberately complex web of subsidiaries and joint ventures, creating, at least in India, a monopoly and abusing the power of that monopoly.”

 

It has also called the Nielsen board of directors “proxies for the world’s largest and most powerful group of corporate takeover specialists (referred to herein and in Nielsen’s 2011 Annual Report as ‘Sponsors’)” and alleged that they took this approach to “‘cash out,’ as part of the typical leveraged buyout ‘exit strategy,’ making billions of dollars in profits.”

 

Among the sponsors of Nielsen are KKR, The Blackstone Group, The Carlyle Group, Thomas H. Lee Partners, Alpinvest Partners, Hellman & Friedman and Centerview Partners. These sponsors, however, have not been made defendants in the suit.

 

NDTV has also said that the problem extends to other markets such as Turkey and Philippines.

 

NDTV managing director Vikram Chandra declined comment as “the matter is in court”. LV Krishnan, CEO, TAM Media Research said: “There is no comment to make right now as the matter is sub judice.”

 

NDTV is being represented by law firms, Sabharwal & Finkel and Luthra & Luthra.

 

The news created ripples in the media industry with many advertisers saying they were shocked by the developments. “I am shocked. They (TAM ratings) are a key component of all media investment decisions today,” said Madhukar Kamath, group chief executive officer and MD of advertising and media major, Mudra group.

 

A media planner who did not wish to be identify, said: “We take TAM ratings very seriously and all our investments depend on them. It is hard to believe that a company like Nielsen, which invests so much in market research, would manipulate the ratings.”

 

“There have been questions about the sample size of TAM and number of meters it uses to arrive at ratings, but in the absence of an alternative in the TV measurement space, we depend on TAM as large investments on advertising have to be made on the basis of some numbers.”

 

Source: The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

 

 

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