Arbitron shares tumble as ratings system delayed
EmptyNEW YORK -- Shares of Arbitron Inc. tumbled on Tuesday after the radio ratings company said it would delay the rollout of a controversial electronic audience measurement system in nine key markets including New York and Los Angeles.
In a surprise announcement late Monday, Arbitron said its earnings this year and next would be lower than previously expected because of the delays, which range between three and nine months.
Arbitron's shares sank $9.61, or 19.7%, to $39.30 in heavy trading Tuesday morning after sinking to a 52-week low of $34.81 earlier in the sesison.
Arbitron announced the delays after broadcasters had complained that the new ratings were based on samples that were too small and underrepresented young adults and ethnic groups, raising serious questions about how reliable ratings were.
The delays represent a significant setback for Arbitron, which has staked its future on the changeover to eletronic ratings system, which has been in development for several years as a replacement to the 1960s-era paper-and-pencil diary system, which is widely acknowledged to be outdated.