The Arbitron Co. waved the white flag yesterday, saying it would close its money-losing television ratings business, and lay off 733 people -- 413 of them in the company's Laurel and Beltsville operations.
The move left the television industry with only one major provider of information on who watches what programs -- A. C. Nielsen. The ratings are used by advertisers to determine how they should spend approximately $15 billion devoted to television spots each year.
New York-based Arbitron would retain 407 workers in Maryland, and another 60 employees in other states to service the continuing radio-station ratings business, Executive Vice President Marshall L. Snyder said.
In addition, he said, Arbitron was pursuing two new television ventures -- surveys to provide stations with the purchase preferences of viewers, and as-yet-uninvented "pocket people meters," beeper-sized devices that would automatically tally the audience of television and radio programs.
Arbitron said the jobs related to the television ratings business would be eliminated at year-end, when the ratings service ends, Mr. Snyder said. Some jobs would last until April.
The news hit Arbitron employees hard yesterday. They said continuing layoffs by other major employers made many despair of getting new jobs any time soon.
One employee, who expects to keep her job and asked not to be named, described a funereal scene of sobbing workers hugging each other inside the Arbitron building in Laurel after yesterday morning's announcement.
Another employee, software specialist Laura Zeigler, carried flowers sent by her husband and wore a button that read "If you zTC think the system is working, talk to someone who isn't." Ms. Zeigler said she was "appalled" to learn she and hundreds others would be laid off.
"People with young children are frightened," she said. "There is no way in the world they are going to get a job anytime soon."
Ms. Zeigler pointed to a banner draped across the building's lobby that praised her division, and said she was supposed to have flown to Minneapolis, home to Arbitron's parent company, Ceridian Corp., to accept a quality award today.
The trip was canceled late last week, however, accelerating long-rampant rumors of layoffs, she said.
The television ratings business -- in which Arbitron placed meters in people's homes and sold the information about who watched what programs to stations and advertisers -- had lost money for years.
"We made some bad business decisions," Ms. Zeigler said. One of the worst, she said, was sinking millions into ScanAmerica, an ambitious project in which some viewers provided information on all their purchases so that stations would know what products were preferred by viewers of different programs.
She said one of her associates had posted in his office a picture of a big white elephant eating bales of money and labeled it "ScanAmerica."
Arbitron started handing out scanners, similar to those used in supermarkets, to viewers in 1984. It ended the project last year.
Mr. Snyder, the Arbitron executive, said that while his company had been pouring money into ScanAmerica, competitor Nielsen had been expanding its conventional sampling of viewer program preferences into new cities -- thus winning profitable contracts from stations and advertisers.
Arbitron had been in the ratings business longest, 44 years, and provided more detailed information faster, Mr. Snyder said. Arbitron relied on meters attached to television sets, which viewers would tally who watched what program, while Nielsen has some of its viewers recall their activities in diaries.
But hundreds of television stations -- some of whom pay more than $100,000 to receive ratings information -- have dropped their contracts with Arbitron over the last several years because Nielsen offered lower prices and more comprehensive coverage, Snyder said.
Neither Arbitron nor Ceridian would release detailed financial information about the television ratings business. Ceridian did say yesterday, however, it would take a $67 million write-off in its fourth quarter to pay for the closure.
Ceridian also announced yesterday it had earned $10.7 million, on revenues of $209 million in its third quarter, up from profits of $9.3 million on revenues of $203.2 million.
Ceridian's stock closed down 25 cents at $19.125 in New York Stock Exchange trading after the announcements yesterday.