Court Reverses Decision on SBS PPM Encoding

April 1, 2010

New York, NY - Mar 31, 2010 - In a reversal of a previous court order, on March 29, 2010, the Supreme Court of New York reversed its previous Feb. 16, 2010, order in which it provisionally issued a temporary restraining order in favor of Arbitron requiring Spanish Broadcasting System to encode its radio broadcasts with the PPM ratings service. The encoding process allows Arbitron's Portable People Meters (PPMs) to collect audience listening data from which Arbitron then produces ratings estimates.

SBS ceased encoding its broadcasts based on a loss of confidence in Arbitron's PPM methodology and its belief that the methodology undercounts minority audiences to the detriment of the minority radio broadcasters. SBS is one of several critics of Arbitron's PPM methodology. One staunch critic is the PPM Coalition, which has voiced its concerns regarding Arbitron's PPM methodology to the FCC, Congress and the Attorneys General of several states. These concerns have resulted in Congressional hearings on the soundness of the PPM methodology.

The Court's reversal states that Arbitron failed to demonstrate that it would suffer "permanent and irreparable harm." In her 10-page order, the Honorable Shirley Kornreich specifically noted Arbitron's failure to show proof that SBS's failure to encode would devalue the ratings that Arbitron provides to other subscribers or cause any meaningful damage to Arbitron's credibility. The Court's Order notes that Arbitron has numerous contracts that expire at different times across 300 different markets, which the court determined undercuts Arbitron's assertion that SBS's pulling of its encoders could by itself have a material impact. "Arbitron's characterization of its business as one in which the loss of any one client will cause irreparable harm has not been established and is not plausible," the order states.

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