Business

Head-scratcher

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Two ratings dinosaurs are betting they can survive in the digital age.

Nielsen, which has had a virtual monopoly on TV ratings for decades, has struck a deal to acquire radio-measurement giant Arbitron for $1.26 billion.

“Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home,” Nielsen CEO David Calhoun said in a statement yesterday.

Still, the proposed combination prompted some serious head-scratching in media and advertising circles, as it seemed like a backward-looking move, especially for Nielsen.

Nielsen had been expected to make a play for a rival such as Rentrak, which has been trying to challenge Nielsen’s ratings supremacy.

“Seems to us like a zig when people were asking for a zag,” Bernstein Research analyst Todd Juenger said.

Nielsen is feeling the pressure from its network and advertising clients to adapt its measurement methods to new digital platforms such as tablets and smartphones. Currently, Nielsen has a pilot test to measure iPad viewing but nothing concrete.

Some industry experts speculate that its bid is about gaining access to Arbitron’s Portable People Meter technology, which captures ad exposures in all environments and could be adapted to include video viewing on tablets and phones.

“Perhaps the methodology is that PPMs could help in using tablets at the very least. This is one of the things TV networks have been complaining about,” said Horizon Media research chief Brad Adgate.

There are also concerns about one company controlling measurement for the country’s two biggest media segments. The deal is almost certain to draw regulatory scrutiny.

The offer represents a 26 percent premium to Arbitron’s closing price on Dec. 17. Nielsen stock rose 4.4 percent yesterday, to $30.92, while Arbitron closed up 23.6 percent, at $47.03.