Kahaani Mein Twist: Nielsen cuts costs 20%+ for BARC TV measurement contract

12 Dec,2013

 

By A Correspondent

 

In entertainment television, it’s called ‘kahaani mein twist’. In cricket commentary, you hear of ‘glorious uncertainties until the last bowl is bowled’. But in the course of business deals too, we often see twists in the tale. Or is it case of people getting real? Or is it too little, too late?

For, the Broadcast Audience Research Council (or BARC) bosses are seeing a real-life soap opera playing out for them.

Readers of MxMIndia would recall the reports that the BARC board had selected French joint industry body Mediametrie (along with watermarking tech provider Civolution and one or more set-top box providers) as the vendor for television measurement.

It was a done deal. We even carried a ‘Big Story’ on Mediametrie. BARC representatives had visited France and the Frenchmen were in turn in India. The papers were getting readied, with a back-and-forth between the legal eagles.

But after the news on Mediametrie was published, at least one other contender for the coveted contract got into action. As we know, TV measurement is currently managed by TAM, a joint venture of the research specialists Nielsen and Kantar. The latter is owned by WPP, which also runs GroupM, Ogilvy, JWT and several other media entities.

The proposed government regulations are clear on cross-ownership – that the measurement company can’t be owned/co-owned by anyone with stakes in some media businesses. Sound logic, but then given ownership patterns of research companies, it rules out some firms. Also, cross-ownership rules have still not been administered in other media sectors.

Given this although Kantar had made a bid for the all-important hardware tech partner phase of the BARC-ruled measurement business, there was a cloud on whether it would get the contract given the TRAI guidelines which are set to be notified soon.

But cross-ownership wasn’t the reason why BARC ruled out Nielsen. It was dosh. Nielsen was charging the moon. Or so we were told.

Pardon us for the looong backgrounder. But, this is television, and like the various soaps and sitcoms, some foreplay is a must. Okay, so let’s get to the point.

Nielsen has now written to BARC saying it’s cutting price.

Yes, you read it right. Nielsen has shaved off over 20 percent of the annual cost. President – India Piyush Mathur has reportedly written a letter bringing down the cost by Rs 13.1 crore per annum. This is thanks to the research major striking a deal with a large business conglomerate (rumoured to be the Tatas) to produce set-top box/meters and a few other components locally. The move saves Nielsen vital monies on custom duties and affords them another shot at the multi-million dollar contract.

The rest of the scope of the project stays: 20,000 households, 25,000 meters, data, metering and collection systems and software. The all-important technology factor is a non-issue since Nielsen too is employing audio watermark knowhow. Nielsen Watermarks using audio signatures will ensure non-stop daily ratings. Given infrastructure issues in India, the crediting approach becomes critical which Nielsen has ensured it will administer very strictly.

What Nielsen has also assured BARC is that the service ownership will be BARC’s.  Also, at the end of five years, the ownership of the meters will be transferred to BARC.

So what does all of this mean? BARC has another Board meeting coming up next week and before that some of the technical/ commercial committee members may meet.

What’s important to note is that the Nielsen pricing is in the region of what will have to be paid for the Mediametrie++ alternative. An industry observer told us this could only have happened with the Mediametrie number leaking out from someone in the BARC Board.

While MxMIndia couldn’t reach BARC officials to confirm or deny these developments, according to the information available, there is a view that Nielsen may be excellent option in the short run and is a more tried-and-tested vendor, but there are many concern over costs escalating over time. The worry is that even though Nielsen has assured that the service ownership is that of BARC, in actual terms this may not be the case and BARC may have to fork out more. A lot of what Nielsen offers is proprietary, for which it could charge a royalty.

Will TAM co-owner Nielsen be the new hardware/technology/data collection vendor for television measurement? It’s not going to be an easy decision for BARC. Like the soap opera on the GECs, we have already seen many twists and turns with television measurement. Watch this space for what happens next.

 

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