Broadband’s Got Game

Feb 27, 2006  •  Post A Comment

The first-time online availability of this year’s men’s college basketball tournament on a fully ad-supported basis could be broadband’s next big game changer.

With the move, NCAAsports.com, in partnership with CBS Sports, CBSSportsline.com and CSTV, abandons the split subscription/advertising model that’s been in place since 2003. “It shows the power of the broadband advertising model,” said Will Richmond, president of the consulting company Broadband Directions. “For the first time, a really high-profile event that could draw a set of consumers willing to pay for it, as they have in the past, has evolved to the point where advertising as a business model is more important.”

The success or failure of the new approach could have implications for other sports and entertainment content online. CBS and other networks are testing pricing models online now for several entertainment properties. But by stripping away the protection of that pay-per-play option for March Madness, CBS will learn whether ads alone can carry an entire event.

“If this has the success we think it’s going to have, we think it can have tangential positive effects on other business we provide and positive effects on the industry in general,” said Joe Ferreira, VP of programming for CBS SportsLine. It could pave the way for additional ad-supported video to be made available online for golf and other sports leagues, for example, he said.

The critical mass for broadband penetration and the proven success of broadband advertising were the sparks needed to test the solo ad-supported strategy, he said. Though CBS previously has sprinkled ads into the subscription Internet packages of the tournament, the network will now learn whether it can draw enough eyeballs to generate more ad dollars than it got with subscription revenue.

“There was extreme interest from the ad community for this product,” Mr. Ferreira said. He declined to provide details on usage of the subscription product the past three seasons.

The tournament starts March 16 and the on-air CBS feed of each game will be offered at NCAAsports.com, both live and on-demand. However, the games will be available only to fans outside of the broadcast viewing area. That means in-market games will be blacked out online based on a viewer’s geographic region. As is customary, the local CBS affiliate in each market will show the game of “primary regional interest” on-air.

That presents an interesting new twist. In the past three years games have been blacked out based on credit card information and registration information supplied by the viewer.

This year CBS will continue to rely on registration information, using the ZIP code to determine the games to black out. The possibility exists that a scofflaw could try to receive games in his or her area by inputting a false ZIP code, but CBS relies on both the ZIP code and IP address verification as a system of checks and balances.

To offer the ads online, CBS takes the “backhaul” feed, which is stripped of ads, and overlays the online-only commercials.

Presenting Internet sponsors this year include Marriott and Dell, and State Farm and Pontiac are also on board as advertisers. Mr. Ferreira expects about 16 or 17 total online advertisers this year.

The new CBS strategy will largely benefit the at-work audience because many of the early games are on-air during the day, making it tough for 9-to-5’ers to watch. CBS will offer the first 56 games of the tournament online. Those games are played throughout the day and into the evening and often overlap. However, the games between the final eight teams will be available only on-air. That protects the CBS network as the stakes become higher and the games draw more attention.

That strategy minimizes the prospect of cannibalization, said Matt Wasserlauf, CEO of Broadband Enterprises, which sells online advertising. The online product will most likely draw viewership during the day, but people will still tune in to the games on TV during prime time, he said. “It will have a smaller draw away from prime-time viewers. … It will have a lot more draw on the fringes of people who can’t access a game and now can on broadband,” he said.

The online strategy should have a halo effect for the entire CBS brand, said Chris Boothe, executive VP and group client leader at Starcom USA, because the free online games will bring more exposure overall to the property. That’s similar to what’s happening currently with NBC’s “The Office,” which is enjoying skyrocketing prime-time ratings at the same time that it’s a top-ranked video download on iTunes, he said.

CBS Sportsline will promote March Madness on Demand, as will CSTV Networks, which includes more than 250 official college athletics Web sites.

The basketball tournament could be another milestone for broadband video in the same way that AOL’s coverage of the “Live 8” concert was last summer, Mr. Richmond said. “Live 8” video was streamed more than 90 million times from July 2 through Sept. 5, according to AOL.