SmallCaps That Count. Literally.

Audience measurement technology has been around almost as long as electronic media. Arthur Nielsen purchased a tool called the audimeter in 1936 to track radio audiences in 1,000 homes. In the early 1950’s, he developed a similar technology for television that, when combined with data from diary keeping “Nielsen Families”, formed the basic ratings system as we know it. In 2008, American television brought in $68.9 Billion in ad revenues, and it was distributed largely on the data captured from those diaries (now around 20,000.)

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One would think the invention of the remote control decades ago would have led to more refined measurement, but Nielsen is a mutlibillion juggernaut that has kept upstarts at bay, much to the frustration of the advertising industry. One complaint is that Nielsen meaures potential reach, not actual impressions. Also, there is no sliding scale and so its model assumes that every commercial in a show gets the same audience. In a 1 hour show, it is logical to assume that more people are there in the beginning than at end after all. http://www.multichannel.com/article/279305-Cover_Story_Thinking_Inside_the_Box.php

Irony at its most cruel, Aliso, CA – based TiVo (Nasdaq:TIVO), www.tivo.com, might offer the best alternative to Nielsen ratings. Yes, the bane of advertisers for having made it easier for millions of Americans to skip commercials altogether also knows the exact viewing habits of millions of viewers to the second. Thought it might kill them inside, advertisers need that information, and it explains why the Company’s Audience Research and Management Division is as important to growth as is DVR sales. Even though TiVo has reached the pinnacle of pop culture – it is used as a verb after all, – it is still a smallcap by most definitions ($1.1B) and nearly ½ of that came from a one day move in reaction to a settlement with EchoStar in late May.

Portland’s Rentrak Corporation (Nasdaq:RENT), www.rentrak.com, measures movie sales through box-office receipts, Blu-Ray and DVD sales and Video-On-Demand.  Its VOD business analyzes over 70 million set-top boxes for the Top 25 multi-service providers, and it has provided the entry for their nascent linear television measurement business. It also has mobile and Internet measurement ambitions and today announced a partnership  with video technology firm Concurrent Computer Corp. (Nasdaq:CCUR), www.ccur.com. The two claims the joint effort will be the industry’s first 3 screen analytics solution. The companies are likely familiar with each other from the VOD market. While Rentrak owns the VOD measurement niche, Atlanta’s Concurrent “creates and supports the operation of everything that happens after a cable customer hits the VOD button on his or her remote”, according to a Seeking Alpha blog by Steve Andrew. http://seekingalpha.com/article/140382-ccur-unknown-stock-huge-opportunity?source=yahoo

ComScore of Reston, VA (Nasdaq:SCOR), www.comscore.com, might be best known for its ranking of top visited web properties, but it is also the definitive source of online consumer behavior. More than 2 million consumers have given ComScore permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing. ComScore panelists also participate in survey research, which captures and integrates their attitudes and intentions. The Company provides custom digital audience measurement and analysis to companies from a wide spectrum of industries.

Columbia, MD based Arbitron (NYSE:ARB), www.arbitron.com, is synonymous with radio audience measurement. Known in the industry as “The Book” it has been deemed responsible for countless format changes and firings of on air talent since its inception. It more or less had the radio industry to itself, until Nielsen re-entered the market last November after a 45 year absence. The Company confirmed in its first-quarter earnings report that the defection of key radio broadcasters to Nielsen for diary-based ratings services in will adversely impact revenue by about $10 million per year starting in 2010. http://industry.bnet.com/advertising/10002074/will-radio-broadcasters-tune-out-arbitron/

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