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March Madness infects the Internet

Posted by iNext - 2006-03-20

The hugely popular US college basketball championships got under way this week, with the CBS TV network looking to slam dunk an Internet experiment that could revolutionise sports broadcasting.
For the first time, CBS, which owns exclusive rights to the tournament, is augmenting normal television broadcasts of games by providing live, streaming footage on the Internet -- free of charge.

While sport events have been offered online before, they have always been on a "pay-per-view" basis.

The CBS model relies on advertising dollars and is being viewed by industry analysts as a possible watershed in the growing push by media executives to develop "new media" revenue streams.

"Instead of asking the viewer to pay, they're asking the advertiser to pay," said John Swallen, senior vice president of research at TNS Media Intelligence.

"So it's an important opportunity to see whether a new revenue model might work," Swallen said.

The first day of the NCAA championships -- also known as March Madness -- drew more than 1.2 million Internet viewers, peaking at what CBS claimed was an Internet record for a live entertainment event of more than 268,000 simultaneous streams.

"While television will always be the centerpiece of the March Madness experience, the numbers and positive feedback we have seen from our users are extremely encouraging," said Larry Kramer, President of CBS Digital Media.

As the tournament progresses, the network is hoping to break the world mark of five million same-day Internet viewers set by Time Warner Inc.'s AOL Music portal last June with its webcast of the Live 8 concerts against poverty.

With the forces of technology banging down their doors, traditional media companies are only too aware of the need to explore programming avenues that extend beyond the domestic television set.

In recent months, all three US television networks have made a limited number of programmes available on the Internet and for iPod users to download for a fee.

The pioneering element of the CBS "March Madness on Demand" service is the absence of the pay-per-view element, which thus requires the network to secure enough television and internet viewers to maintain and attract advertisers.

"The issue here is how to extend opportunities beyond traditional, over-the-air broadcasts without cannibalising the television audience," said Swallen.

The CBS answer has been to prevent online viewers accessing any NCAA match-up that is being broadcast on television by their local CBS affiliate -- a strategy that fits comfortably with the format of a multi-game sporting tournament.

The network has also created a separate advertising package for the online broadcasts, catering to a perceived demographic of business travellers and office workers.

The prospect of tens of thousands of desk-bound staff signing on for the webcasts is a disturbing one for employers, amid studies that showed a productivity plunge during March Madness even before Internet streaming became available.

The global outplacement consultancy Challenger, Gray and Christmas estimated that the cost in lost wages from staff watching the games online could reach as high as 3.8 billion dollars over the 16 days of the tournament.

Some firms, like Washington's Corporate Executive Board which sells management research, decided to disable employee access to the online broadcasts.

"It's a business focus issue," the company's chief research officer, Derek van Bever, told the Washington Post. "Is there any good reason to run this risk? The answer is no."

CBS Sports spokeswoman LeslieAnne Wade stressed that the network was not encouraging people to shun their work, although she acknowledged that some might do so.

"Obviously, we are happy that this programming has that kind of popularity that employers feel the need to create rules against people watching," Wade said.

The March Madness webcast includes a "boss button" that, at the approach of a superior, users can click to bring up a fake spreadsheet covered in financial data.

"That's just for the humour of it really," said Wade.

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