CBS Will Offer March Madness Free Online
CBS Corp. wants to inject a little madness into online media.
The TV network plans to make all early-round games from the NCAA basketball tournament, known as March Madness, available for free on the Internet. When the tournament gets into full swing March 16, it will mark the first time a major broadcaster has shifted such an important programming franchise onto the Web without charging a subscription fee.
The March Madness on Demand service will black out local games -- plus the final three rounds of the tournament, when only one game is played at a time -- to avoid direct competition with CBS affiliates.
Broadband capacity will limit the Web audience to a few hundred thousand viewers at a time.
But analysts and industry executives described the experiment as a key inflection point in the Internet’s maturation as a platform for the distribution of video. Eighteen big-name advertisers, including Marriott International, Dell Inc. and Pontiac, already have purchased all the available ad spots.
“The advertising world is willing to support streaming video in a way they haven’t been willing to support it in years past,” said Larry Kramer, president of CBS Digital Media.
In many ways, the NCAA tournament is an ideal vehicle for testing the willingness of viewers to fire up their computers to watch programs once reserved for television.
As many as four games are played at a time during the early rounds, yet CBS viewers can watch only one on their TVs. Fans are often rabid, rooting for their local college, alma mater or picks in office betting pools. And many of the early-round games take place during the week, when millions of enthusiasts are parked in front of high-speed connections at work.
“It combines three of America’s time wasters: sports, gambling and surfing the Internet at work,” said Jeff Lanctot, vice president and general manager of Avenue A/Razorfish, which bought ad time on the webcasts for Nike. “March Madness is going to show the real winner in the Digital Age is the consumer, because they’re going to have choices like never before.”
Network TV executives are under heavy pressure to find new revenue streams as ad-skipping technologies and declining broadcast audiences threaten their business. So they’re experimenting with selling shows through Google Inc. and Apple Computer Inc. and occasionally streaming premiere episodes of new series to boost their profile.
CBS, part of Viacom Inc., agreed in 1999 to pay $6 billion for the exclusive broadcast and digital rights to National Collegiate Athletic Assn. programming, with the basketball tournament as the crown jewel. It’s trying to wring as much revenue from the deal as possible.
The network has camera operators, producers and color commentators create a feed for each tournament game. Why not give fans access to the three games they can’t watch on their local CBS affiliate?
Ads will be stripped from the TV feed and replaced with Web-only commercials sold by CBS SportsLine, a unit of CBS Digital Media. Major League Baseball, which operates a subscription service for live games online, is providing technical support.
Courtyard by Marriott is a big sponsor for CBS’ on-demand service. The hotel chain will run commercials during games and include interactive ads across the website to reach “road warriors” turning on their computers to watch online.
“It’s a cluttered landscape out there in terms of getting information to consumers,” said Deborah S. Fell, a Marriott senior vice president. “This is the type of venue we’re looking for.”
The service, at ncaasports.com/mmod, may open the market for other Internet broadcasts, CBS executives said.
“We’re going to continue to find extensions from our basic coverage,” said Sean McManus, president of CBS Sports and News.
The network has made March Madness available online before, but through subscription services with Yahoo Inc., then CSTV Networks Inc., which CBS acquired in November. Last year the companies charged $19.95 to access the first three rounds of games online.
But so far, it’s been unheard of for networks to charge nothing to view streamed live events whose broadcast rights they own. Networks have been afraid that viewing on the Internet, where ads don’t fetch as much money, would cut into TV audiences.
“The risk is cannibalization and substitution,” said Robin Diedrich, a media analyst with Edward Jones & Co. “But the risk of not doing it is probably as great.”
CBS executives say they aren’t worried because they’re doing it from a position of strength. Last year’s tournament ratings were the highest in a decade.
The booming online ad market, coupled with the recent success of other live Internet events, persuaded the company to roll the dice. America Online served up 90 million live streams and archived clips of the Live 8 concerts. On Dec. 16, 1.6 million people tuned in live to Yahoo to watch Howard Stern’s last moments at CBS Radio.
CBS is making a great effort to protect its core TV business. The company will use technology to determine the location of someone’s Internet connection, then prohibit online access to the game that’s on local TV. CBS says the blackout rules should let most users watch 37 of the first 56 games. And the service won’t feature the Elite Eight, Final Four or championship rounds, when there’s only one game on at a time.
One challenge is broadband capacity. CBS is using a novel method to handle demand: Instead of letting the service be overloaded, the company will cut off access after a few hundred thousand viewers (CBS says it doesn’t know exactly how many yet). Other interested viewers will be put in a virtual waiting room with a scoreboard and indicators of where they stand in line. People who register in advance will have a shorter wait.
“If you’re slapping your brand on it, you better be darned sure that what comes across a user’s PC monitor pretty much approximates what they’re used to getting in a traditional TV environment,” said Todd Chanko, a Jupiter Research analyst.
Martha Day Sanford will take what she can get. Last year, she and her colleagues at a Boston consulting firm would crowd into their company’s fitness center -- one of the few rooms with TVs-- to watch games. A big University of North Carolina Tar Heels fan, she is curious to see whether that room will be less crowded this year because of March Madness on Demand.
“Everyone is going to have it up on their screen instead of cutting out of work early for the day,” she said.
Corporate managers may not be thrilled about the lost productivity. But CBS has included a special feature to help keep them in the dark: the Boss Button.
When Web viewers click on it, the CBS video player is instantly replaced on screen by a fake spreadsheet.