From Arbitron’s perspective, the company's near monopoly in radio is both good and bad. It provides a steady reliable cash stream. Steve Morris once remarked to Wall Street that he didn’t care about the health of radio because he had long term contracts with built-in escalator clauses. No matter what happened, his revenues and revenue growth were safe.
The downside is that Arbitron’s revenue growth is limited to the additional amount the company can shake down from broadcasters (something like 3-5% a year). That’s why PPM is so important for Arbitron. It raises the company’s expenses modestly, but it enables Arbitron to sock stations in PPM markets with an additional 50-60% rate hike.
But Arbitron aspires to be something more. Arbitron still hopes that PPM will be its chance to get back into the television game along with Internet and anything else it can encode.
Which explains Infinite Dial 2010.
Infinite Dial 2010 is the splashy research project just released with great fanfare. While the subtitle Digital Platforms and the Future of Radio gives the illusion the study is about radio, the medium that generates the vast majority of Arbitron’s revenue and profit is almost an afterthought.
Radio isn’t hot. It doesn’t grab the headlines like new-media or television. If Arbitron wants to get some attention outside radio, it needs to focus on what’s hot.
So they have questions about television versus Internet video. They ask about DVD purchases, texting, and YouTube versus Hulu. Yes, there are a few questions about radio and radio web sites, but nothing new. (Compare Infinite Dial to Nielsen's Three Screen study linked here.)
At a time when radio needs to understand how best to compete in a digital world, there is one lone simplistic question that addresses the subject. Thanks, Arbitron.
Arbitron through things like Infinite Dial takes the money that radio gives the company, and then spends it in an effort to be less reliant on radio for revenue.
That should make you feel warm and fuzzy next time you sign that Arbitron check.