Taming the TAM

Updated: Jul 25 2013, 05:49am hrs
Mark Twain once famously quoted and made famous a quote by Benjamin Disraeli, There are three kinds of lies: lies, damned lies, and statistics. It might be reckoned that if someone were to ask him about the recent developments in the broadcasting industry, it would have evoked the response, I told you!

Lately, Television Audience Measurement (TAM) Media Research Private Ltdthe prime audience measurement and TV ratings agencyhas been in the eye of a legal and regulatory storm with broadcasters, regulators and various industry stakeholders raising questions as to the veracity of the ratings provided by the agency.

Last year, NDTV created a stir by filing a $1.4 billion suit against TAM before the New York Supreme Court, alleging inter alia negligence, fraud, corrupt practices, tampering, falsification and fabrication of data. While the allegations are serious, and the verdict from the US court is still awaited, TAMs actions have also been put under scrutiny before the Competition Commission of India (CCI), pursuant to an information filed by Prasar Bharati in November last year.

In the information filed before CCI, Prasar Bharati has emphasised the close nexus between TRP ratings and TV revenues obtained from advertising, and has alleged that TAM by abusing its dominant position in the service market for popularity evaluation of TV programmes has adversely affected the prevailing competition dynamics in broadcasting market by denying access to advertising revenue to certain broadcasting companies, and by providing skewed, discriminatory and incorrect popularity measurements to firms.

TAM, like other agencies worldwide providing similar data, uses a type of data sampler which records viewing habits of audiences, which in the case of TAM is called People Meter. It has been alleged by Prasar Bharati that TAM has placed only 8,000 such data samplers across households in India, with almost all such samplers having been placed in urban areas, and almost none have been placed in rural areas, resulting in a misrepresentation of data, wherein data pertaining to cities is being projected as pan-India data.

Prasar Bharati has usually tried to cater to the tastes of the rural audiences, and has accordingly tailored its programming for them. By removing this large audience base from their sample set, TAM has negated the value of a substantial portion of popularity weightage, which would have otherwise been attributed to Doordarshan and the bouquet of channels offered by Prasar Bharati, thereby denying them access to an indicator crucial for raising advertising revenues.

It has been an admitted position that TAM has enjoyed a dominant position in the market for TV audience metrics, with the only other operators in the market being the Doordarshan Audience Research Team (DART; which is the only functional TV audience metric, accounting for rural audiences), and Audience Measurement Analytics Limited (aMap; established in 2004, it tried to distinguish its services by giving more real-time data on audience measurements to the broadcasters). But based on the information received, CCI on March 5 passed an order under section 26(1) of the Competition Act, 2002, observing that it believed that Prasar Bharati had established a prima facie case against TAMs abuse of the dominant position it enjoyed in the market for popularity measurement for TV programmes in India. Giving due regard to the grounds raised by Prasar Bharati in the information, CCI noted that TAM, by discriminating in provision of services to the customers, restricting technical development relating to services to the prejudice of the customers and denying market access to the market for advertising to its customers, appeared to have been in contravention of the provisions of the Competition Act, though any final determination would only be made subsequent to a full-fledged investigation into the matter.

It is against this backdrop of legal and regulatory issues that the information and broadcasting ministry has recently suggested that following the recent phases of digitisation in the metros and 38 other cities, and with the digitisation process pending in other parts, it shall make it mandatory for the set-top boxes provided by multi-service operators and direct-to-home operators to contain an embedded chip, calculating audience metrics, thereby trying to ensure a reasonable and fair representation of viewership data.

In this regard, the ministry has highlighted upon the role of the Broadcast Audience Research Council (BARC), an industry organisation mooted by industry stakeholders back in 2008, in the face of dissatisfaction with TAMs data. Initially slated to be a joint venture between the Indian Broadcasting Federation and the Indian Society of Advertisers, BARC now stands as a representative organisation consisting of representatives from all of IBF, ISA and the Advertising Agencies Association of India, with each having an equal voice in the design and monitoring of the rating system and administration of BARC, irrespective of the funding pattern. Though mostly dormant since inception, BARC has lately been taking fast strides towards placing itself as a reliable alternative to TAM in the market for television metrics.

The move to set up BARC is a step forward in ensuring fairness in the industry, and promoting competition in the market for TV audience metrics by providing a credible alternative to TAM. While the ministry awaits an industry consensus on other matters pertinent to the functioning of BARC, it is worthwhile to assess the relevance of these developments. The complaint before CCI seems justified, on the grounds that TAMs actions have allegedly distorted the competitive dynamic in the market. Whether TAM is found to be in contravention and subsequently liable to pay penalties under the Competition Act is a matter that remains to be seen. Though the ministrys interest in entrusting BARC with the key position of being the custodian of viewership data collected from the mandatorily embedded viewership measurement chips has drawn concerns towards audience privacy, as with many other directives of the government with regard to data collection from private persons, the ministry giving due respect to such concerns has expressed that it shall ensure that such data is not misused.

That the issue of television audience metrics warrants a certain amount of regulation is not debated, what needs to be deliberated upon now is the appropriate manner of regulation, be it the involvement of a regulator like Trai or be it a robust mechanism of self-regulation. Safeguarding the interests of consumers and the advertising industry demands it.

Dhanendra Kumar

The author is former chairman, Competition Commission of India, and founder chairman of Competition Advisory Services (India) LLP