Byron Allen’s media companies – Weather Group, Entertainment Studios Networks (ESN) and CF Entertainment – sued Nielsen, seeking billions of dollars in damages for fraudulent misrepresentation and concealment fraud.
The lawsuit says the way Nielsen has historically measured TV viewing for years — through its Home Viewer Tracking and Recruitment Panel System — was unreliable for Allen’s ESN Networks account. given their limited distribution. He alleges the ratings agency knew the metric was unreliable, but covered up luring business from Allen Media, which paid millions in fees.
Nielsen declined to comment on the lawsuit.
“This lawsuit concerns Nielsen’s outdated, unreliable and flawed television ratings service, and the resulting harm to media companies that rely on Nielsen to sell advertising time,” the complaint explains.
Nielsen has been under pressure for years to update the way it collects data and expand its measurement metrics. His problems were compounded during Covid when he struggled to get measuring equipment out into the field. The Media Rating Council suspended Nielsen’s accreditation for national television ratings in September.
The suspension applied to Nielsen’s national television service, Local People Meters and Set Meter Markets. The MRC said such suspensions occur when a company is found to have “non-compliance with material standards or operational issues that are deemed to have had an adverse effect on service”. A suspension review is underway, however, and Nielsen has promised to start rolling out an improved set of measurement tools dubbed the Nielsen One by the end of 2022.
The networks involved in Allen’s lawsuit, however, are not the major broadcasters and cable channels whose large stakes in the $70 billion television advertising market are causing consternation. Instead, networks including Comedy.TV, Recipe.TV, and MyDestination.TV are at the bottom end of the spectrum and have actually not been rated by Nielsen for years. Allen says there’s an unfair threshold for networks to be rated, and therefore to charge advertisers more: They have to pay Nielsen “millions of dollars,” he claims. After accepting pony in 2017 for ESN Channels, the suit says the resulting data fell far short of the “best in class” information promised by the measurement company.
Allen’s civil lawsuit, filed in the Circuit Court of Cook County, IL, calls for a jury trial. Referring to the MRC’s decision, he calls for “contract reform” – meaning a cheaper price for contracted Nielsen services that no longer have the same MRC seal of approval.
But the bulk of the lawsuit focuses on damages and recovering fees she paid Nielsen for her work with Entertainment Studios’ seven networks (Comedy.TV, Recipe.TV, MyDestination.TV, ES.TV , Pets.TV, Cars.TV and, later, JusticeCentral .TV). Initially, these were not carried by large MVPDs, so Allen saw no point in hiring Nielsen for the measurement.
“Nielsen sales representatives continued to press, however, and advocated for Entertainment Studios to pay Nielsen to assess these networks. In the end, Nielsen convinced Entertainment Studios to add the ESN networks [saying] ESN Networks had achieved sufficient distribution and viewership for Nielsen to reliably assess them.
Nielsen began providing ratings reports for ESN Networks in 2017. “Entertainment Studios knew from its own internal data that it had an audience on its networks, particularly during major ad slots. He expected Nielsen to capture this audience in his reports, which should have allowed Entertainment Studios to generate substantial advertising revenue. However, Nielsen failed to capture those viewers for much of the review period and for many prime time slots. Because advertisers condition ad payments on the number of viewers who watch the ads, Nielsen’s inability to capture viewership on ESN networks has damaged entertainment studios. When Entertainment Studios complained to Nielsen about its failures, Nielsen faked it, defending its panel model and bragging that it’s the industry’s “gold standard.” Nielsen did not reveal what it already knew, which was that its rating services were fundamentally unreliable.
“Nielsen didn’t tell Entertainment Studios the truth – that, in fact, its ranking services were unreliable for networks like those owned by Entertainment Studios.”
Read the full costume here.
The suit did not name the overall dollar amount that Allen is looking for. But in a separate statement, he said: “The industry has suffered billions of dollars in losses, and we can no longer afford this damage. Nielsen must quickly resolve these issues. Otherwise, I expect Nielsen to soon face a class action lawsuit worth more than $10 billion.
Dade Hayes contributed to this story