The success of Nielsen’s Local People Meters has driven the biggest player in the radio industry to seek a similar model.

Arbitron may be the winner of Clear Channel’s desire to modernize the way it measures listenership of its radio stations. Arbitron said Monday it would offer a proposal next month that could commercialize a radio ratings service using the Portable People Meter by April 2006.

The ratings company thinks it has a five-year lead on any possible competitors. “We urge the rest of the radio industry to take up Clear Channel’s sense of urgency for the adoption of electronic measurement,” said Steve Morris, president and CEO of Arbitron.

This summer, Arbitron will begin making available data from its PPM test in Houston. In cooperating with Nielsen, Arbitron has been developing the PPM as a TV and radio ratings service for the past five years.

Clear Channel has requested proposals from companies, including Arbitron, within the next three months. Clear Channel provides Arbitron with more than 20 percent of its annual revenue. The San Antonio-based radio group last year signed a four-year contract with Arbitron that runs through Dec. 31, 2008, amounting to about $54 million annually.

And that price isn’t giving Clear Channel what it wants. The current diary system used by Arbitron measures listenership over a three-month period. Those results are then published a month after that period.

“That’s crazy given the technology that’s available today,” John Hogan, head of Clear Channel’s radio division, said. “We think it’s appropriate to ask for audience estimates based on current technology that are more reliable, more accurate and more readily available.”

“We spend $55 million a year on ratings information. We want more for our money.”

David Utter is a staff writer for Murdok covering technology and business. Email him here.