New Delhi Television Limited (NDTV), India's oldest and largest news network, has tossed a legal bomb at The Nielsen Co.
NDTV has filed a multi-billion dollar lawsuit in the New York Supreme Court against TAM (Television Audience Measurement), a joint venture between Nielsen and Kantar Media Research, levelling charges of viewership data manipulation and bribery.
According to NDTV, rampant manipulation of viewership data has been going on for eight years, and when presented with evidence earlier this year, top executives at Nielsen pledged to make changes. But the Indian news giant says these promises have been false ones, says a report from Hollywood Reporter.
After years of years of manipulation, NDTV has finally blown the whistle with its July 25 lawsuit, seeking damages of at least $810 million for its losses over the last eight years due to TAM’s allegedly fraudulent actions.
The lawsuit contains merely allegations against the venerable ratings research company that operates in more than 100 countries, earns more than $5 billion a year and has been around since 1923. But if proved, they could be very serious, reports PTI.
The suit reads, "Nielsen's wrongdoings, including, but not limited to, negligence, gross negligence, false representations, prima facie tort and negligence per se (based on violations of the Foreign Corrupt Practices Act and the Dutch Corporate Governance Code), have had catastrophic effects on customers, on the television industry, on advertisers and on and viewers in the US and overseas."
NDTV states that while it initially had raised queries regarding credibility of TAM in December 2004, it has subsequently become clear that the TAM data in itself was tainted and corrupt. Despite countless mails and meetings from 2004 to 2012, between NDTV representatives and Nielsen, Kantar and TAM to redress same, TAM continued to release the same corrupt data with no steps towards remedying any of the grievances and corrupt practices pointed out by NDTV.
TAM installs “PeopleMeters” in over 8,000 sample homes to monitor viewership patterns, giving critical input to corporate decisions on the advertising purchases that fund and sustain the broadcast industry. In its lawsuit, NDTV claims that the small sample size and low turnover have given rise to rampant corruption.
NDTV further claimed that the private-equity firms have ordered “cost cutting and cost avoidance measures to maintain share prices in the short term, so they can ‘cash out,’ as part of the typical leveraged buyout 'exit strategy,’ making billions of dollars in profits.”
Such measures, NDTV said, have resulted in “disregarding their explicit obligations to thousands of customers such as NDTV."
The Indian broadcaster also alleged that these cost-cutting measures are among the main reasons behind the supposedly manipulated TV viewership data.
If proven, this would send shockwaves through the broadcasting sphere. For quite some time, suspicion has been harboured by journalists and viewers alike that television consumption data is manipulated. Earlier in 2001, Outlook Magazine and later in 2002 Zee Group had carried exposes on manipulation of TAM ratings.
However, with no other way to verify it, as TAM is the only well-known player in the field, the matter has been kept under the wraps.
NDTV too, is under scrutiny, as the company has been running under heavy losses and has a huge debt burden.
April 22, 2013, 5:55 am UTC
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