Byron Allen’s companies sue Nielsen over ‘fraud by concealment’ in its ratings data

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Media mogul Byron Allen is suing Nielsen Media Research through his companies The Weather Group and Entertainment Studios Networks allegeding what they call “misrepresentation” and “fraud by concealment” in relation to TV ratings data that its networks bought.

The suit notes that Allen’s companies have paid Nielsen millions of dollars in fees over the years but claims the company’s methodology for gathering and calculating TV viewership is unreliable, particularly in the case of networks with lower distribution, like many of the emerging brands Allen’s company operates.

Nielsen is often unable to provide ratings for networks with low distribution because they may not register enough or even any viewership via its normal data sources to be statistically accurate.

Ratings data can never be tracked down to the exact number of people watching, so Nielsen relies heavily on statistical models, among other methods, to determine its viewership estimates.

Nielsen did not respond to multiple media outlets’ requests for comment, which isn’t uncommon when litigation is pending.

The Weather Group is the parent company of The Weather Channel, the most prominent property in the Entertainment Studios portfolio. It also includes Local Now and Weatherscan.

Allen’s ESN division owns and operates Comedy.TV, Recipe.TV, MyDestination.TV, ES.TV, Pets.TV, Cars.TV and JusticeCentral.TV. Many of ES’s smaller networks have significant streaming and OTT distribution that Nielsen typically doesn’t track. In these cases, the content provider may be able to look at internal metrics or buy data from another source geared more toward digital platforms. 

The lawsuit alleges that Nielsen’s sales teams convinced Allen’s networks that their distribution had reached a point where they could be reliably rated but the data it turned over painted a much different picture.

It notes that the networks had internal tools to track viewership and that its own data allegedly didn’t match up with what Nielsen provided.

The suit specifically alleges that Nielsen knew its ratings data is “fundamentally unreliable” but still sold it to Allen’s companies.

Nielsen’s ratings data methodology and overall accuracy have been the subject of debate for years. The COVID-19 pandemic presented additional challenges because the company was limited in how many measuring devices it could deploy into households for a period of time.

In September 2021, the Media Ratings Council dropped its accreditation for Nielsen’s national TV data, following the council’s assertion that pandemic viewership was undercounted.

Media giant NBCUniversal has been exploring ways to set up its own ratings metric system and solicited RFPs from a variety of companies, including Nielsen.

For its part, Nielsen is working on Nielsen One, an offering that is aimed at combining linear and digital viewership across multiple platforms and devices among other features. However, the service isn’t expected until late 2022, and some are wondering if it’s too little too late as the company has been considered too slow to respond to changes in the media landscape.

Nielsen makes much of its money when TV stations and networks pay fees to access the data it gathers on both it and rival channels. This can then, in turn, be used internally to determine what shows are performing well and as part of sales pitches to advertisers.

Ratings data, which typically includes not only the number of people watching but broad demographic information about viewership, is often vital for media companies. Ad supported networks often rely on this data at least in part to help determine how much they can charge for advertising during particular shows. In general, higher rated shows or ones that reach audiences prized by advertisers generate much more ad revenue.

Although Allen’s networks represent only a tiny fraction of the more than $70 billion companies spend on TV advertising each year (and some of them likely don’t even register 1% of that), inaccurate ratings data could be linked to costing a broadcaster millions or even billions in revenue.

Allen’s suit did not specify how much the company is seeking in damages. However, Allen later issued a separate statement saying he could see Nielsen facing a $10 billion-plus class action suit.

He also claimed that the industry as a whole has lost “billions” of dollars due to Nielsen’s alleged inaccuracies.