Nine not happy, dumps SMI over gap in figures

By By Paul McIntyre and Alexandra Roach | 10 August 2012
Underbelly: Badness.

Nine Entertainment Co. has pulled its support from the Standard Media Index (SMI) and is understood to be proposing an alternative revenue reporting system for the TV sector.

Nine executives were unavailable for comment but the company has cited dissatisfaction with the gap between SMI’s numbers and its own figures as the reason for its proposal. Details of Nine’s alternative reporting system remain tightly held at this stage but rival broadcasters are said to have been briefed.

SMI confirmed Nine’s decision to drop its service.

Nine’s SMI defection is the first from a major media owner since it launched in 2009 and comes as magazine and newspaper publishers consider developing their own revenue reporting initiatives similar to what the free-to-air TV sector does with KPMG.

ACP Magazines head of sales Louise Barrett said recent SMI data did not paint an accurate picture of the magazine industry as it did not include all media agencies or direct revenue.

“The SMI data doesn’t have an accurate reporting measurement number when it comes to magazines’ share of the market,” Barrett said.

Pacific Magazines commercial director Peter Zavecz told AdNews SMI data was “not totally representative of the whole market” and the issue was on the Magazine Publishers of Australia’s agenda.

Newspaper Works chief executive Tony Hale said: “It is an issue that has been spoken about. I hope it is something the newspaper industry does as SMI really only shows about 40% of our revenue. But a great deal of complexity is involved to develop a system across all newspapers.”

Fairfax Metro Media commercial director Ed Harrison said he saw “quite different numbers” internally than SMI reporting but Fairfax was continuing to work with SMI to “get to the bottom of the problem”.

Seven West Media chief sales and digital officer Kurt Burnette said his company was under contract with SMI and was sticking with its arrangement for now. He would not disclose when the company’s SMI contract was up but it is understood to be December.

“What we do in the future remains to be seen,” Burnette said. “The reality with SMI is it provides direction in where things are trending. It’s the other information on advertiser categories and other media sectors which is the most interesting. In that regard, it’s good data.”

Ten Network’s SMI contract expires next April and the broadcaster said it will decide then on whether or not to continue.

A key concern among media owners is the leverage monthly SMI data gives media agencies to push down prices – if a media owner appears to be losing share, media agencies apply more pressure to extract better deals.

SMI publisher Jane Schulze said: “SMI sources its data directly from the booking systems of all the major agency groups and large independents, representing more than 95% of agency billings. So we are very confident in the veracity of the agency data.”

This article first appeared in the 10 August 2012 print edition of AdNews.

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