As their ratings decline, TV's top networks claim it's Nielsen's methods that are really slipping

In Chicago, they ignored Michael Jordan.

On June 14, 1996, more than 2 million area viewers were tuned to NBC, hoping to see the Bulls capture the NBA championship in game 5 of the finals against the Seattle SuperSonics. As the Sonics pulled out an 89-78 win right at 11 p.m., the network announced it would air its postgame show on sister cable channel CNBC. It seemed a smart move: NBC Sports could continue its coverage while affiliates went to local news. But when the ratings arrived the next day, Peacock execs were scratching their heads. Nielsen Media Research reported that in Chicago CNBC had snagged a rating of zero. Nil. Nada. Zippo. ”How can that be?” asks an exasperated Nicholas Schiavone, NBC senior VP of research. ”Zero audience to a Chicago Bulls postgame show? During the NBA finals? In Chicago? I mean, that makes no sense.”

And more important to the networks, no cents. For almost as long as television has kept America glued to the couch, Nielsen ratings have been its currency, measuring viewing audiences via an intricate system of ”tuning meters,” ”people meters,” and viewers’ handwritten logs. But in the last four months, ABC, NBC, CBS, and Fox have been raging against the Nielsen machine, publicly complaining that the company is handing them distorted figures based on shoddy measurement methods — and costing them, by one estimate, almost half a billion dollars annually in lost advertising revenue. While Nielsen denies it has any systemic problems — on the contrary, it cites service improvements — the majors are mad as hell, vowing not to take it anymore, and backing the threat with $40 million to develop a rival ratings service. ”Nielsen is composed of a bunch of Sluggos,” Schiavone carps, ”and the only thing they’ll respond to is a stick across the head.”

Thwack! The drubbing began in earnest Dec. 16, when the Big Four went public with a full-page ad in the Hollywood trades: ”Our confidence in Nielsen is Down.” It was a direct retort to Nielsen’s own Nov. 20 ad, ”Our service is Up,” that celebrated an increase in the number of metered homes nationwide and ”record high cooperation” from those households asked to join the national survey. The network response tarred Nielsen with five complaints that, translated from industry jargon, indict the company for surveying the wrong people, doing it incompletely, and then issuing fluctuating numbers that belie Nielsen’s own local ratings.

Could it be? Is the only currency of this $46 billion business suspect? Nielsen maintains its biggest clients (who pay the company $10 million a year) are upset because they have so much to lose — industry predominance — and have been losing it at a steady clip for years, their ratings dropping like an anchor in the 500-channel sea. With February’s sweeps complete, the company reports that network audiences have fallen 17 percent since 1995, and that 1.3 million Americans have stopped watching prime time altogether since last season. But don’t blame the messengers — they’ll get sarcastic: ”If their numbers go down, it’s Nielsen’s fault,” says Nielsen spokesman Jack Loftus. ”If their numbers go up, there’s this eerie silence. Fox is running full-page ads saying that they’re the number two network. They’re not saying ‘Something must be wrong with these numbers.”’

In a world where a single rating point can be worth $150 million a year, it’s hard to find an objective observer. Cable companies, whose audiences keep growing, downplay their dissatisfaction. “Problems with Nielsen need to be addressed,” notes USA Network research VP Tim Brooks, “but the [broadcast] networks are screaming fire in a theater where somebody is smoking a cigarette.” Given the many tales of wonky ratings, however, confidence in Nielsen is down. “Nickelodeon is having a banner year,” says Susan Nathan, senior VP of research at ad agency McCann-Erickson. “Are the huge increases real? I don’t know.”

“There isn’t a sector of this business that isn’t pulling its hair out,” moans one high-ranking nonnetwork exec. “No one knows what the hell is going on, whether ratings shifts are real. I mean, we’re going nuts.”

Behind the palpitations are numbers that, to the networks, look as sturdy as a Larry King marriage. According to CBS executive VP of research David Poltrack, if you compare ratings for Late Show With David Letterman in the 36 markets where Nielsen conducts both local and national surveys by meter, the local measurements are 15 percent higher. “These are two measures of exactly the same thing,” he says. “They should yield identical results, and they don’t.”

Fox has seen similar discrepancies in ratings for Martin, which draws higher local numbers than national ones in the Southeast. Sports broadcasts are feeling the fluctuations too. NBA games on NBC are down 10 percent so far this season—a strange drop in usually consistent numbers; NBC, ABC, and Fox all say their NFL fall ratings dipped inexplicably. And a July episode of CBS’ Saturday-morning cartoon Santo Bugito drew 539,000 viewers—but no 2- to 5-year-olds.

Another suspicious example: Soap opera weddings traditionally light up the ratings. Last July 6, the day before Julia and Noah got hitched on ABC’s All My Children, the show scored 2.73 million women 18 to 49 years old. The day after the wedding, the figure was 2.69 million. The day of the wedding: only 2.49 million.

Nielsen insists that these instances, like CNBC’s goose egg for the Bulls’ postgame show, are normal statistical anomalies. “The overall picture is so consistent it’s almost scary,” says Nielsen senior VP of research Barry Cook. Those raising doubts, he adds, “didn’t see their research analysts throw out 100,000 comparisons that looked okay, just to find the one that didn’t. It’s a no-win situation.”

Ironically, the current wave of criticism stems in part from Nielsen’s “improving” its sample audience from 4,000 to 5,000 homes using a new recruiting method. “Nielsen families” are chosen at random from the 97 million U.S. homes with TVs; they’re paid $50 to $100 to have their homes wired. But the networks say recent samples do not represent a true cross section of U.S. viewers. According to ABC, Nielsen’s September-January data deviate from the ratings company’s own estimates of all U.S. households by underrepresenting single- person households (by 15 percent) and low-income households (by 26 percent), and overrepresenting homes with college graduates (by 31 percent). “It’s hard to blame this on the weather,” says ABC marketing exec Alan Cohen.

“Frankly, it’s very difficult to manage the composition of the sample,” replies Cook, who falls back on an age-old bugaboo of pollsters: “People answer a question differently [than] when a census taker asks.” As for other inconsistencies: “There’s a chance we have too few satellite homes, but we’ve made it up with more cable homes,” he says.

The sample isn’t just skewed in the selection process, the network rap continues, it’s skewed in practice by technical glitches that in January reduced the households counted (the in-tabulation, or in-tab, rate) to about 80 percent—back to 4,000 homes instead of 5,000. And which homes screw up most? “The ones that do the most viewing or the ones that have the most TVs and VCRs,” Cook admits. “There’s more that can go wrong.” He adds that survey rules written 25 years ago, when most homes had one set and a handful of channels, may be “causing some imbalances. We are reviewing the rules.” It’s calm talk like this from Nielsen that drives the networks crazy.

Nielsen does have field reps who monitor the meters, and Cook says they’ve pushed in-tab rates up to 90 percent in recent weeks, in part by adding 16 reps to a force of about 150. But more may be needed. In an internal Nielsen memo dated Feb. 25, head of field operations Juan Mendizabel notes that his staff canceled all vacations in January, adding “There are several caveats that come with the improved performance that we have seen. We cannot expect [the field reps] to continue to be effective if they continue to work 60-plus-hour weeks.”

Helping to keep pressure on Nielsen is SMART (Systems for Measuring and Reporting Television), a $40 million, four-year experiment funded by ABC, NBC, and CBS that will begin rating programming in 500 Philadelphia-area homes this fall. Billed as a less cumbersome and more reliable technology than Nielsen’s, SMART would require about $75 million before a 1999 national rollout could begin. Is it just a scare tactic? “Nielsen’s attitude is, The customer has nowhere to go—why should we fix it?” says NBC’s Schiavone. “Well, you know what? They may have guessed wrong.”

Advertisers are more than curious about SMART: Procter & Gamble, General Motors, AT&T, and 10 major ad agencies signed on to the project earlier this year. And last week word surfaced that Reuters America is weighing bankrolling SMART’s launch.

For the time being, though, everyone’s playing on the same lumpy field. Just hope any biases lurking in the Nielsens don’t torpedo your favorite show. “We still have to live or die off them,” sighs Fox programming VP Bob Greenblatt. “It’s like justice—sometimes the jury system works and you put away the bad guy. And sometimes you put away the good guy.”