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Broadcast ratings and ethics.

Broadcast Ratings and Ethics

In industry, as in government, the desire for ethical behavior sometimes takes the form of self-regulation. Very often, such an effort is brought about through investigations or pressure from the news media. Sometimes it arises from complaints by competitors or customers. Examples are numerous. For example, investigations into Wall Street activities have shown illegal insider trading and stock manipulation. In the area of defense procurement, investigations have brought to light instances of bribery, kickbacks, and other unethical and illegal practices.

Usually, the investigations result in demands for rules and standards that would limit or prevent improper behavior. Sometimes, new laws or commissions result. Most of the time, however, the hope is that self-regulation would be more effective than new laws or agencies. In the case of broadcasting, the stimulus for self-regulation arose from Congressional hearings.

In 1963, the House Subcommittee on Communications of the Interstate and Foreign Commerce Committee, under the Chairmanship of Oren Harris, held hearings to investigate ratings and audience research. It was hypothesized that if program selections by stations were based on ratings, and ratings were either faulty or fraudulent, then the stations were not acting in the public interest.

As a result of these hearings, the importance of ratings was emphasized and their validity and credibility became a growing industry concern. To deter the government from entering the business, broadcast industry leaders, with the tacit approval of the Justice Department, set up the Broadcast Rating Council as a self-regulatory organization. In 1982, the name of the Council was changed to Electronic Media Rating Council (EMRC), to encompass all electronic media, such as radio, television, cable, etc. Membership includes various broadcast and cable groups and networks, with the American Association of Advertising Agencies and Association of National Advertisers as liaison members. Membership dues cover the salaries and cost of administration of the EMRC.

Establishing Standards

The job of the Rating Council remains the same today as it was in 1964, namely to maintain rating confidence and credibility. It is the belief of the Rating Council that adherence by the rating services to specific minimum standards is necessary to meet the basic objectives of valid, reliable and useful electronic media audience measurement research. Acceptance of these minimum standards is voluntary and is one of the conditions of accreditation by the EMRC.

These minimum standards are divided into two groups. One refers to Ethical and Operations Standards, which govern the quality and integrity of the entire process by which ratings are produced. And, since behavior may be determined by the information that customers have available, the Council also established Disclosure Standards which specify the detailed information about a rating service that must be made available to users, to the EMRC, and to its auditing agent. In other words, these minimum standards for ratings services are designed to assure users of ratings that the services that are accredited by the EMRC, not only say what they do but do what they say.

In effect, the Rating Council has established standards of "ethical behavior" for rating services-at least as defined by Webster's New Collegiate Dictionary: "behavior conforming to accepted professional standards of conduct."

In this instance, the minimum standards are basically professional standards of conduct established by the EMRC, and agreed to by the rating services in order to gain EMRC accreditation. For example, a rating service must submit complete information on its survey methodology, including sampling techniques, recruiting procedures, weighing, tabulations, coding and computer software as well as the end result -- ratings. It must also agree to conduct its service as represented to users and subscribers, be willing to submit to EMRC audits, and pay for the costs of these audits. Accreditation is granted to particular rating service reports, not a rating company.

At the present time, the services that are accredited are: Arbitron Television Market Reports and Arbitron Radio Market Reports; Mediafax, a TV ratings service in Puerto Rico; the Nielsen Station Index, the Nielsen Meter Market Service, and the Nielsen Television Index which includes its People Meter Service; RADAR, published by Statistical Research Inc. and Birch Radio Quarterly Summary Reports.

The financial structure of the EMRC is simple -- the rating services pay EMRC for the cost of the audit and EMRC pays the auditors -- thus maintaining an arms length relationship between the parties. By using this procedure, we have established that EMRC, rather than the rating service, supervises the audit.

Up until this point, the Rating Council has been concerned only with what the rating services do and their behavior. We recognize that what the rating services are attempting to measure refers, as far as possible, to what samples of listeners and viewers are doing, and that the behavior of these samples is representative of audience behavior overall.

However, local television ratings in most markets are published only four times a year: November, February, May, and July; and they are each based on surveys that take place during a four-week interval. Of the four television reports, July is the least important, because advertisers can use that report only as an indication of summer viewing, while the other reports may be used to represent "normal" year-round viewing. Thus, advertisers assume that the other three ratings reports are representative of "usual" audience behavior.

How Accurate Are Media Ratings?

However, since the dates of the surveys are known in advance, stations generally take the opportunity to conduct extra promotions to attract audiences and increase their ratings. Activities designed to increase (or "hype") the audience to a program or station during survey (sweeps) periods usually include special programs, contests, extra promotions and extra advertising.

But, at what point does a station's promotion ("hype") activity encroach upon the rating service process? In most markets, Arbitron and Nielsen have respondents fill out a diary to indicate their viewing and (for Arbitron) listening during the period being surveyed. If stations attempt to reach or influence these samples, so that respondents report or record more or different viewing than actually occurs or would have occurred under normal circumstances, these activities are called "rating distortion activities." Attempts to reach or influence the sample, rather than the audience as a whole, are examples of "unethical behavior."

As an industry organization, the EMRC has expanded its role and is now interested in station activities as well as rating services. We and the rating services have broad guidelines. While many stations prefer us to write strict guidelines that they could follow, it would be difficult to cover all possible cases. Rather, we ask that stations consider the spirit of the guidelines. The objective is to improve the quality of the ratings data, and reduce ratings distortion so that advertisers can be assured that they are getting what they pay for. Overall, we are trying to raise the level of ethical behavior in the industry. The question that must be asked is not whether a certain practice is legal but whether it is ethical.

I've been asked many times how I would define a specific station activity. How would I define distortion? My answer usually is, "How would you define it if it was used against you? What would you say, if what you are doing or planning to do, was done by your competition?"

Broadcasting is a business that is based on intangibles. The radio and TV signals cannot be seen or felt. They are transmitted through the air, and it is assumed that "people out there" will hear or see the programs and commercials. Time is the sales unit -- but its value varies with program environment and rating. The ratings are based on samples that are assumed to represent all listeners or viewers in the area being surveyed. If the integrity of the rating process is lost or degraded, the value of the medium will depreciate as well.

Ethical Behavior is Good Business

Similarly, reputation may be considered an intangible. But, it too has a value. In a business where one's word seals a contract and where friendships are built, a devalued reputation will cost more than money. Ethical behavior enhancing one's reputation is not only morally correct but also good business. And, reputation generally lasts a lot longer than a specific act.

In my experience, the most successful station groups have tended to be those that rose above the defined limits of ethical behavior. When I was at Westinghouse Broadcasting Company, radio and television licenses were granted to serve the public interest, convenience, and necessity. We believed that operating in the public interest was good business. We believed that ethical behavior was good business. We believed that good programming would win over bad programming; that you didn't have to program to the lowest common denominator to be successful.

Ultimately, Westinghouse became one of the most profitable broadcast groups in the country. Its record was such that Newton Minow, as Chairman of the Federal Communications Commissions, wrote a letter pointing to Westinghouse as a prime example of the good that can come out of the group ownership of stations. It has been estimated that this letter saved Westinghouse roughly a billion dollars by allowing them to stay in the business.

In sum, codes of behavior have been with us since Moses brought the Ten Commandments down from Sinai. They are recognized as the basic codes for a civilized society. Unfortunately, they are not always followed. But they do provide guidelines and goals toward which we can aspire.

In the broadcast business, we don't have the equivalent of the Ten Commandments. We have rules written by the rating services defining some "station activities" which might distort ratings. But, there are always people who search for and find loopholes. I believe that ethical behavior is more than compliance with written standards or legalities.

It seems to me that ethical behavior is something that we know innately. It might be analogous to the Supreme Court definition of pornography, "I can't define it. But, I know it when I see it." Ultimately, the question we should ask is not, "is it legal" -- but "is it ethical?" And we should only engage in practices that are unquestionably proper and ethical.
COPYRIGHT 1989 St. John's University, College of Business Administration
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Goldberg, Melvin A.
Publication:Review of Business
Date:Jun 22, 1989
Words:1690
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