SRI pulls plug on Smart TV ratings

Measurement service lacks funding

NEW YORK — Smart, an aspiring TV measurement service that hoped to compete with Nielsen Media Research, threw in the towel Thursday.

After two years of trying to raise the $100 million needed to build Smart, Statistical Research Inc. — the company behind Smart — has shut down the division that’s done the preliminary work on the rating service.

As a result, the New Jersey-based SRI has laid off half of its 30-person staff, an SRI spokesman said. The company will continue to produce media research studies.

Funding woes

At first, SRI believed that it could raise all of the $100 million from the Big Four broadcast webs. When profits dried up at the networks, ABC, CBS, NBC and Fox told SRI president Gale Metzger that they would not pay the whole freight.

Metzger then hoped to raise $50 million from the broadcast networks and get the rest from outside investors, but the sum was still more than the webs wanted to pay.

“It was unrealistic in this environment to expect three or four large entities to shoulder the burden,” said Alan Wurtzel, NBC’s research chief.

David Poltrack, CBS’ research chief, said his company decided not to invest in Smart because the network did not think Smart could become a viable alternative to Nielsen by 2002, the year the Eye web’s contract with Nielsen expires.

Poltrack added that because of new technologies, Smart’s proposed rating system would become obsolete by 2005.

“It didn’t make sense to put so much money into an interim system,” Poltrack said.

Most cable networks did not seriously consider putting money into Smart because they viewed the service as a network-biased operation.

“If I were in ( the cable networks’) place, I would have been wary, too,” Poltrack said.

System praised

Both Wurtzel and Poltrack praised the quality of Smart’s system and its initial rating information. And they said the venture’s specter caused Nielsen to improve its service.

Wurtzel said he hoped that SRI would continue trying to raise money to create Smart. No other competitors have emerged to challenge Nielsen.

“Nielsen has a monopoly position. We have no negotiating leverage,” Poltrack said. “They’re motivated to maximize value for their shareholders, not to create the best measurement system.”

The network may have to offer financial incentives to Nielsen for the rating service to improve, Poltrack said.