Byron Allen Sues Nielsen Alleging Misrepresentation

Media mogul Byron Allen is suing Nielsen, claiming the ratings company was not forthcoming about the reliability of its audience measurement data for smaller TV networks, reports The L-A Times

The suit filed Wednesday in the Circuit Court of Cook County, Ill., said Nielsen committed fraud when it agreed to provide ratings to Allen’s Entertainment Studio Networks, a group of seven niche TV channels that have limited distribution on cable and satellite systems.

Audience levels for smaller networks are harder to measure and are more likely to be subject to errors.

Allen’s suit lands at a time when New York-based Nielsen has been under assault from its dissatisfied clients who use Nielsen ratings data to set advertising rates. Some media companies, such as NBCUniversal, have begun to use alternative services for audience measurement.

The accuracy of the company’s data — drawn from a sample of 40,000 homes equipped to measure viewing habits — has been questioned throughout the media industry in recent years as viewers increasingly turn to streaming services for their video content.

Nielsen had to admit that it undercounted TV viewing during the pandemic as COVID-19 health protocols kept the company from updating its panel of homes. The company also acknowledged it undercounted out-of-home viewing from September 2021 through January 2022. Media companies say the discrepancies have cost them millions of dollars in ad revenue.

The lawsuit cites a litany of criticisms and problems Nielsen has faced in recent years. But the crux of Allen’s complaint is that Nielsen persuaded executives at his company to add his Entertainment Studios Networks channels to its existing contract in 2017, adding “significant fees” to what was already being paid (Allen also owns the Weather Channel and nearly two dozen network-affiliated TV stations) and they were unhappy with the results.

Nielsen executives allegedly told the company that the audience for ESN channels could be reliably counted, even though they had limited distribution (the suit does not state the current number of households the channels reach), and that the count would ultimately benefit ad sales. “These representations were, and are, false,” the suit said.

Entertainment Studios began receiving ratings data for the channels in 2017. The company said its own internal data showed that Nielsen’s reports “did not capture” the audience viewing the channels, which include Comedy.TV, Recipe.TV, Cars.TV, Pets.TV, MyDestination.TV, ES.TV and JusticeCentral.TV. The company alleges its viewing data for the Weather Channel is inaccurate as well, as its audience has shrunk because of increased competition.