Indian media company NDTV’s lawsuit against Nielsen for TAM, the audience measurement ratings for television in India, and a joint venture of Nielsen and Kantar, is a fascinating long-read: over 192 pages long, it features details of interactions (emails and meetings) between NDTV and TAM, beginning with NDTV’s complaints about inaccurate data, and rigging of results, alleging a monopoly in the Indian market, and also that Nielsen promised, but refused to invest in TAM, despite acknowledging issues of rigging and inaccuracy of data, and NDTV, as a client, suffered as a result of this. NDTV claims that the loss of revenue caused to it, “on account of the false, fabricated and manipulated data released to the public by Nielsen, Kantar and TAM over the past eight (8) years is not less than $810 million.” The details below are on the basis of a copy of the lawsuit uploaded by Deadline. You can download a copy of the lawsuit here. The first 75-80 pages have most of the information.
Why should this lawsuit be of interest to the digital industry?
- Firstly, because it indicates that panel data can be gamed, and from a mobile perspective, Nielsen also has a joint venture with Informate which uses panel data. Of course, by no means are we suggesting that that data is being gamed. While NDTV mentions discrepancies between survey data and TAM data, we really don’t know how reliable survey data is as well. This is just something that media planners use to justify marketing spends to marketers.
- Secondly, with the digitization of cable networks across India, MSO’s have an opportunity to create a return path for collecting data, for information on what kind of content people are actually viewing. TAM has a miserly sample size of just 8000, on which spends targeting 129 million households are being determined. Surely, someone can do better than that.
What The Consultant Said About TAM
The NDTV lawsuit includes information revealed to it by a whistleblower called “The Consultant” as well as a certain sting operations conducted on those claiming to rig TAM data for companies. Here’s what the consultant revealed, as alleged by NDTV’s lawsuit:
- The identity of PeopleMeter home addresses were not top-secret, are available to everyone for a price. Leaking of an existing list of supposed-to-be-confidential PeopleMeter homes in the city of Bangalore showed the existence of homes with meters installed as far back as 2007 and 2008.
- Peoplemeter homes had been compromised through bribes. People were being paid to catch certain channels for longer periods, thereby artificially increasing the ratings of certain networks. He shared information of specific instances of data manipulation by the consultants for certain channels.
- TAM personnel actively participated in the bribery, and middlemen and “consultants” that manipulate the TAM system, are endemic across the TAM network. TAM data collectors and employees of TAM being “accessible” for a price (bribe), technical and field work being outsourced, often to cable operators. The Consultant used to bribe TAM personnel as well as PeopleMeter homes in order to manipulate ratings for TV channels and claimed that he was successful at doing so. The Consultant named several employees of TAM who took bribes through other consultants to fix ratings for channels. The Consultant also pointed out that one of the employees of TAM had currently moved to a competing broadcaster.
- How the Consultant managed to get a TAM PeopleMeter installed at his residence, despite being a part of the TV industry, by misrepresentation and bribing. The Consultant said that his own home was empaneled as a panel home by another consultant in connivance with TAM. The Consultant shared a copy of a check for Rs. 85,000 (US$ 1,700) which he received as a payment for one month from the other consultant hired by the said channel for being empaneled as a TAM panel home to allow manipulation to take place from his own home. The Consultant claimed that he was promised a similar payment on a monthly basis and that the Consultant’s employment particulars in the TAM empanelment form were faked to enable his house being listed as an SEC A home.
- The Consultant further disclosed that the Consultant had worked for a channel and the said channel had also hired a consultant to fix ratings in the past and the arrangement continued between the said channel and that consultant (hired by the said channel) for 6 months but was discontinued later because the said channel was not completely satisfied with the increase in the ratings, and also because the consultant hired by the said channel could not commit to increased ratings in the desired territory (Mumbai).
- The Consultant claimed that the approximate bribe for a channel to infiltrate panel homes in any territory for enhanced ratings was in the range of Rs 4-6 crores (US$ 1-1.5 million) per channel per TAM panel.
- (Earlier) while the Consultant was employed for a South India based channel he had approached a very senior official in TAM to point out that despite better reach/content/viewership, etc., the ratings of the said channel were lower than the closest market competitor, and after the meeting, the Consultant’s channel was approached by a person representing himself to be a consultant offering his services to take care of the said channel’s ratings.
- The Consultant explained that TAM’s sample size for “NEWS” was smaller, and as a consequence of this smaller sample size, news is an easier market for the consultants to work on, as fewer homes with PeopleMeters need to be manipulated to have a significant impact on this smaller sample. The Consultant pointed out that in the segment of General Entertainment Channels (hereafter “GEC”), despite the sample size being larger than news, the sample is still relatively small especially in relation to the large revenues generated by GEC channels and as a result corruption was rampant where not just channels, but producers are also independently involved because most, if not, all revenues are linked to show ratings, including producer commissions. In a separate instance, the lawsuit mentions an email sent dated February 1, 2006, by Dr. Prannoy Roy, founder of NDTV, pointing out to LV Krishnan of TAM that that in Bombay one male of 35 plus years of SEC B spent more than six hours continuously watching a competitor. Those hours of non-stop viewing accounted for 22% of total English news market in Bombay and 6% nationally.
- During the course of the January 20, 2012 Meeting and the February 28, 2012 meeting, various names of persons, channels and broadcasters were provided by the Consultant, and on other occasions by NDTV, to Paul Donato (Executive Vice President and Chief Research Officer, Nielsen) and Robert Messemer (the Chief Security Officer of The Nielsen Company). Many of those names were and are linked to political figures. It is common knowledge that one- third of news channels in India are owned by politicians or their proxies. It is also common knowledge that 60% of cable operators in India are owned by politicians or their proxies. Many of these politicians have been benefiting from the corruption of TAM data and continue to benefit from the continued publication of such corrupted data.
- Issues of very low turnover of PeopleMeter homes with several homes continuing for six or more years when no home should be in the sample for more than 2-3 years.
- Instances of fraudulent and willful misrepresentation of people entering these secret homes to get meters installed.
- Poor security for data collection systems using corrupt practices. Lack of proper verification in the people meter homes.
- The Consultant further shared his views with the representatives of NDTV and Nielsen on corruption in the Karnataka market, where 80% of the TAM field employees were corrupted, 100% of the data of TAM households in Karnataka was available in the market for a price, with most panel households amenable to being bribed.
NDTV claims that the Consultant’s allegations relating to thirty-four (34) of those homes were subsequently checked and verified to be correct by Messemer, and that Nielsen and Kantar have reported that, after a thorough investigation, the information provided by the Consultant was correct and that “he was very credible”. Additionally, “At the meeting on April 11, 2012, the representatives of Nielsen and Kantar unequivocally admitted that the information provided by NDTV’s Consultant was highly credible. The computers of select TAM India personnel were sent to the United States for forensic analysis by an outside agency, from which results were awaited. Nielsen and Kantar further admitted that there were deficiencies in the data storage methods at TAM India, a complete lack of control between field operations and the TAM head office, communication lags and that Bangalore and Karnataka were sources of highly corrupt data”
NDTV also showed TAM, Nielsen and Kantar representatives evidence: photographs and video recordings taken inside such homes with PeopleMeters, copies of signed welcome letters from TAM officials to PeopleMeter homes, and copies of visitor log reports that TAM field staff entered while visiting homes. NDTV posits that the manipulation and corruption in the system was mainly facilitated because of small sample size, and if the sample size is larger, the task of manipulating data would be more difficult.
The lawsuit also mentions a “broadcaster” who:
- Stated that the top management of his channel was involved in corrupt practices to fix ratings.
- Identified to NDTV a person who was a cable operator from Hassan, Karnataka, as the consultant who did the “fixing” job for the broadcaster, and was a liaison between the channel company and TAM.
The Sting Operation
On April 3, 2012, representatives of NDTV (Rahul Sood, Sidharth Barhate and Anand Mohan Jha), and (allegedly) two field staff employees of TAM (one provided his first name, while the other did not disclose his name) met at Ramada Plaza Hotel, Juhu, Mumbai.
- The TAM employees revealed that they were employed in Mumbai to look after, and collect data from, TAM meters. They showed their TAM ID cards, TAM manuals and explained how the meters operate, and the number of meters /areas that they looked after.
- They claimed to have effected manipulations in the past for other channels and were willing provide the same “services” for “any” channel that was ready to pay the demanded consideration (bribe). They were confident that they could triple channel ratings of NDTV in Mumbai over a period of two to three weeks in the required target group. They stated they had direct access to homes and visited those homes periodically (at least 3 to 4 times a week) and were in a position to easily influence what the households watched/viewed.
- They said by paying a bribe of US$250 to US$500 per household per month, the TAM households could be made to watch only those channels which they insisted upon. They further informed the NDTV representatives that although they knew Krishnan and the TAM senior management, they needed to be in immediate touch with TAM supervisory level employees for execution of their illegal tasks.
The Nielsen Study
In another part of the document, NDTV claims that in a meeting held on April 11, 2012 at The Taj Palace Hotel, New Delhi, representatives of Nielsen and Kantar, on the basis of a 60 day study following the allegations, “admitted the claims of NDTV, including, but not limited to, the following systemic anomalies resulting in corrupt/motivated TAM data:
a. That over 50% of the panel homes were unaware that their addresses and details ought to be confidential and were also not aware that the panel homes were supposed to report back to TAM in case anybody unknown
contacted those panel homes.
b. That the average age of a panel home was 2.7 years, which indicated no turnover at all. (NDTV explained that the average age of the panel home was 2.7 years because TAM had added a large number of homes since
2009, bringing down the overall average age of the homes).
c. Paul further admitted that over 18% of homes were older than 4 years, while 40% of the homes were older than 3 years.
d. That the sample size of homes for measuring English news and business viewership was small and needed to be enlarged.
e. 48% of the homes surveyed in Delhi and Mumbai (54 homes were surveyed) were outlier homes, that is, the viewership was abnormal and did not fit in with overall trends for the target audience.
Nielsen and Kantar representatives, at the meeting held on April 11, 2012, the representatives of Nielsen and Kantar made recommendations that
- a passcode would be introduced so that the panel homes could ensure the identity of TAM employees,
- they would double the SEC A and B homes (target audience for news and business) in Delhi, Mumbai and Bangalore,
- add 500 additional homes over the following 6 months
- report data only if a channel has a minimum number of viewers,
- reduce the problem of negligible manipulated homes affecting high market share,
- ensure that channels ought to be present in a minimum threshold number of towns in a panel to qualify for appearing in ratings reports of that panel,
- replacement of panel homes in highly manipulation sensitive areas on a priority basis,
- enforce panel home rotation rate of 33% by 2013 and 25% by 2015,
- a total of 20,000 meters be installed all over India by 2015,
- set up an audit by KPMG for a 3 month study,
- create an independent 8 member internal audit team, and
- set up an independent ombudsman who would report to the CEO and the Board of TAM India.
- setting up a new security position (Chief Security Officer) with a team that would report only to the Board and CEO of TAM India, carrying out a security audit, separate from research audit, whose findings would be shared only with the Board, conducting regular surprise security checks on any personnel/field offices/ panel homes of TAM India, improvement of data storage techniques, mandatory background checks on new hires and existing employees, immediate stopping outsourcing of all field and technical activities
NDTV says in the lawsuit that the ‘remedies suggested were clearly only “cosmetic” providing a
temporary “band aid” to what is clearly an enormous problem with the Nielsen Process.’ NDTV proposed to Nielsen the following actions:
- Taking criminal action against offenders for corrupt practices
- Making a public statement of Nielsen’s intent to crack down on ratings offenders
- Refraining from publishing data for niche channels until the sample size hits a minimum of 5,000 for SEC AB (upper socio-economic groups)
- Monthly all India sweeps/surveys
- Publishing both mean and range for the data (e.g. Channel X viewership range 3%-37%)
- Increasing the number of PeopleMeters to 24,000 with immediate effect and up to 50,000 PeopleMeters by 2014
- Improving rotation of PeopleMeter homes
- Appointing an independent security firm to ensure sanctity of PeopleMeter homes, parallel homes and compliance by TAM staff
- Appointing an independent auditor for all data
- Banning outsourcing of all technical services
- Installing systems to prevent leakage of confidential information such as addresses of PeopleMeter homes, and referring all outliers to independent technical experts on a weekly basis.
As per the lawsuit, NDTV is now seeking $580 million for gross negligence against TAM and misrepresentations, $810 million for fraud, $125 million for negligence and gross negligence against Nielsen, $125 million for negligence and gross negligence against Kantar, $790 million for breach of contract against TAM, $250 million for prima facie tort against TAM and millions more on various costs including legal fees and punitive damages.
Bear in mind that the lawsuit contains allegations made by NDTV. Lets see how Nielsen responds.