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This means that CBS [CBS
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] wins no matter which team comes out on top, and wherever you choose to watch the games. CBS isn't worried that it'll lose TV ratings because it's offering the games online. They figure people will watch whether it's on TV or on any of the web sites CBS is streaming to and meantime, CBS gets the ad revenue.
In 1999 CBS paid $8 billion for rights to the NCAA tournament games over 11 years. This was a big bet that the games would bring in revenue beyond just TV. And now they're broadcasting on the radio, as well as on the Internet, a fast-growing business. CBS is bringing in roughly $500 million in annual revenue from the sports season this year.
The web casts will bring in an estimated $21 to $25 million in revenue, up from $10 million last year and $4 million in 2006. DOUBLING every year--wow! Obviously this ad supported model works: when CBS offered the games via subscription, the company brought in only $250,000 in revenue.
There's another angle this year: Facebook and CBS announced a deal to provide brackets for picking tournament winners. CBS Interactv said that this is the fastest growing application on the social network, it could have three million members by the end of the month. This definitely fits with CBS strategy--put its content out there in as many places possible (it has a deal to distribute through YouTube, unlike the other networks, which have stayed away).
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes