109758--2/27/2006--ARBITRON

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{capital, credit, financial}

{system, service, information}

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{provision, law, control}

{acquisition, growth, future}

{property, intellectual, protect}

Risk Factors Relating to Arbitron s Businesses and the Industry in Which Arbitron Operates Arbitron s business, financial position and operating results are dependent on the performance of its radio audience measurement business. Technological change may render Arbitron s products and services obsolete. If Arbitron is unable to successfully adapt to changing technologies and customer demands, either through the development and marketing of new products and services, or through enhancements to its existing products and services, its business, financial position and results of operations would be adversely affected. Consolidation in the radio broadcasting industry has led to Arbitron s increasing dependence on key customers. The loss of a key customer would significantly reduce Arbitron s revenue and operating results. Consolidation in the radio broadcasting industry may put pressure on the pricing of Arbitron s radio audience measurement service and related software sales, thereby leading to decreased earnings growth. Arbitron s agreements with its customers are not exclusive and contain no renewal obligations. The failure of Arbitron s customers to renew all or part of their contracts could have an adverse effect on Arbitron s business, financial position and operating results. Arbitron expects to invest in the continued development and commercialization of its PPM services, which may not be successfully developed or commercialized. The commercialization of these services will adversely affect Arbitron s operating results, at least in the short term. The success of Arbitron s commercialization of the PPM is dependent on contract manufacturers who produce the PPM equipment according to Arbitron s proprietary design as well as those who manufacture parts and develop certain software applications. The failure of Arbitron to obtain, in a timely manner, sufficient quantities of quality equipment and the necessary software applications to meet Arbitron s needs could adversely affect the commercial deployment of the PPM and therefore could adversely affect Arbitron s operating results. Arbitron s inability to obtain Media Rating Council ( MRC ) accreditation of the PPM service, in a timely manner, could delay the commercialization of the PPM service, which could adversely affect Arbitron s business. The success of Arbitron s radio audience measurement business depends on diarykeepers who record their listening habits in diaries and return these diaries to Arbitron. The failure of Arbitron to recruit participants and to collect these diaries could adversely affect Arbitron s business. Arbitron s ability to recruit participants for its surveys could be adversely affected by governmental regulations. It may become more difficult for Arbitron to reach and recruit participants for its audience measurement services, which could adversely affect Arbitron s business, financial position and operating results. Arbitron s success will depend on its ability to protect its intellectual property rights. One of Arbitron s strategies is to expand its international business, which involves unique risks and, if unsuccessful, could impede the growth of Arbitron s business. Arbitron is dependent on its proprietary software systems for data collection, processing and reporting for current and future business requirements. Significant delays in the completion of these systems, cost overages and/or inadequate performance of the systems once completed could adversely affect Arbitron s business, financial position and operating results. The expansion of services into new areas could be adversely affected by the customer s inability to organize sales efforts and utilize ratings in the advertising buy-sell process. Criticism of the Arbitron audience measurement service by various industry groups and market segments could adversely affect Arbitron s business. Arbitron s future growth and success will depend on its ability to successfully compete with companies that may have financial, marketing, distribution, technical and other advantages over Arbitron. The media research industry is exploring options to achieve greater influence over the providers of audience measurement. An economic downturn generally, and in the advertising and radio industries in particular, could adversely impact Arbitron s revenue. Advertisers are pursuing increased accountability from the media industry for their return on investments made in media. As a result, advertisers may shift advertising expenditures away from less accountable forms of media, such as radio, which could have an adverse effect on Arbitron s business, financial position and operating results. Arbitron enters into agreements with third parties to use certain data and services in connection with the provision of its current services. In addition, Arbitron may need to enter into agreements with third parties to assist with the marketing, technical and financial aspects of expanding its services for other types of media. In the event Arbitron is unable to use such third party data and services or if Arbitron is unable to enter into agreements with third parties, when necessary, Arbitron s business and/or its potential growth could be adversely affected. Long-term disruptions in the mail, telecommunication infrastructure and/or air service could adversely affect Arbitron s business. Risk Factors Relating to Arbitron s Indebtedness Risk Factors Relating to Owning Arbitron s Common Stock Changes in market conditions could adversely affect the market price of Arbitron s common stock. It may be difficult for a third party to acquire Arbitron, which could depress the stock price of Arbitron s common stock.

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109758--2/27/2006--ARBITRON_INC