Will US courts be willing to hear NDTV case against Nielsen?

On Tuesday, Firstpost had reported that NDTV had sued The Nielsen Company, Kantar Media, TAM India and other defendants in the US. TAM India, a 50:50 joint venture between Kantar Media and Nielsen, is a research company that measures television audiences. Their ratings, TAM, is now the de facto ‘currency’ for TV audience measurement in India.

Justifying their decision to file a suit in New York, NDTV says in its plea that this is because TAM India’s owners, Kantar Media and Nielsen, are based in New York and conduct their business there. Furthermore, they say that decisions taken by these two companies are the root causes for the corruption of data, as a result of which NDTV suffers.

The dispute is much larger than the fight between NDTV and TAM. Reuters

“The lack of funding by Nielsen and Kantar is the underlying cause that has led to the corruption of TAM data. The primary reason that data could be so easily manipulated in India was due to the persistent refusal of Nielsen and Kantar to provide adequate funds for TAM to increase its sample size and invest in the systems/quality/security procedures,” NDTV says in the suit.

The first issue, then, will be for the Supreme Court of the state of New York to accept NDTV’s contention on the jurisdiction. Are US courts the best forum for this appeal against an alleged wrong caused in India? It is only if the court accepts NDTV’s argument will the dispute be heard. If the court rejects the jurisdiction argument, NDTV will have to file a case in India.

The dispute is much larger than the fight between NDTV and TAM. TAM data is the basis on which advertisers decide on the allocation of their advertising budgets. The importance of TAM is underlined by NDTV in the suit. “Nielsen and Kantar, through TAM… are the only organisations in the business of collecting and releasing weekly television viewership data in India. While Nielsen, Kantar and TAM …are also liable for indulging in corrupt practices by manipulating viewership data in favour of channels that are willing to covertly provide monetary inducements/payments/bribes to TAM officials.”

At the heart of the falling out between NDTV and TAM India are two issues. First, the sample size. Second, the alleged corruption of TAM officials by NDTV’s competition (by implication). “Since NDTV is among the very few broadcasters that has refused to indulge in any corrupt practices, naturally its ratings have suffered,” NDTV says.

NDTV’s lawsuit demonstrates continuous dialogue between NDTV representatives and TAM India, Nielsen and Kantar Media representatives from 2004 to 2012 – and that is not unusual. Most broadcasters have, from time to time (especially, of course, when their ratings are lower than competition), complaints about TAM data. The issue of the number of PeopleMeters and their deployment is one that requires considerable investment – and one that has been discussed and debated since the launch of the PeopleMeter system.

The larger issue, perhaps, is in the manipulation of data, as alleged by NDTV. Rumours of corrupt practices by the ‘last mile’ – the executives charged with collecting data from households where the PeopleMeters are installed – have done the rounds. NDTV charges that not enough has been done to address their concerns, which they have repeatedly brought to the notice of officials at TAM India, Nielsen and Kantar.

The broadcast industry will now be forced to acknowledge the elephant that has been in the room for years. While there is no telling which court will decide, and how the court will decide on the suit, the positive development of the dispute is that there will be heightened debate and discussions on the concerns highlighted by NDTV.

TAM is not one of many yardsticks available for the industry – it is the currency. It is the basis on which all TV spends are decided. And if, thanks to this, the measurement is improved, it’s a development that will please all advertisers – the ones who part with the money.

It will not please all broadcasters, though.

Disclosure: Firstpost is owned by Network18 that also owns CNN-IBN, CNBC-TV18, IBN7, CNBC-Awaaz and othernews and entertainment channels.

Updated Date: Aug 01, 2012 16:26 PM

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