109758--2/27/2007--ARBITRON

related topics

{capital, credit, financial}

{system, service, information}

{product, market, service}

{provision, law, control}

{acquisition, growth, future}

{property, intellectual, protect}

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. Long-term agreements with Arbitron s customers limit its ability to increase the prices Arbitron charges for its services if Arbitron s costs increase. If Arbitron s PPM ratings service does not generate the revenues that it anticipates, or if Arbitron s ability to earn such revenues is delayed, its financial results will suffer. Arbitron expects to invest in the continued development and commercialization of its PPM ratings service and the National Marketing Panel Service, which may not be successfully developed or commercialized. The costs associated with commercialization of these services will adversely affect Arbitron s operating results, over the commercialization period. Arbitron s inability to complete the process of the Media Rating Council ( MRC ) audit of the PPM methodology, 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. It may become more difficult and more expensive for Arbitron to reach and recruit participants for its audience measurement services, which could adversely affect its business, financial position and operating results. Arbitron s ability to recruit participants for its surveys could be adversely affected by governmental regulations. Arbitron has limited experience designing, recruiting and maintaining PPM panels. The license of proprietary software that will enable enhanced access to respondent-level data to third-party software providers and customers could adversely affect the market for some of Arbitron s existing software products. 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 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. 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. 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, or sales of Arbitron common stock, 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--2/27/2007--ARBITRON_INC