CBS (NYSE: CBS) risked its sports and digital reputations on being able to deliver a seamless, online viewing experience for March Madness.…

CBS (NYSE: CBS) risked its sports and digital reputations on being able to deliver a seamless, online viewing experience for March Madness. A few glitches aside — like the music that played instead of game audio for part of one game — so far the risk has paid off and then some. Around 1:30 eastern, the March Madness On Demand site even broke a record with 268,000 concurrent viewers. (Yahoo (NSDQ: YHOO) served 214,000 concurrent users on Howard Stern’s last day at CBS; AOL (NYSE: TWX) managed 175,000 concurrently for Live 8.) Most of the time, concurrent users hovered at 150,000.

By 5 p.m. eastern, more than 1.2 million streams had been served and CBS was on a trajectory to break 2 million for Thursday alone.

Some observations from an intense day of viewing (I have to admit I’d be doing this anyway; March Madness is in my genes; in fact, the other Kramer at helped with some testing):

– The MMOD world is divided into VIPs who signed up early and were guaranteed priority entry and general admission, last-minute sign-ups. Either route requires registration for Whether I entered as a VIP or general admission, the wait was never more than a few minutes. CBS accommodated VIPS first, then expanded bandwidth to allow more concurrent users.

– Billy and I tested the geographic black-out policy by logging in from two different regions as the same user with a St. Louis zip code. In each case, the appropriate regional game was blacked out.

– Switching between games was relatively fast. Full screen was decent, not broadcast quality but quite watchable. Some stuttering.

– For those who want to watch the minimized screen so they can multitask, an option that takes up less screenspace would be welcome.

– Archived audio and video are up along with highlights.

– It’s not a threat to TV viewing; it’s a substitute when no TV is available and a supplement for those who want to watch more than one game at once but don’t have DirecTV.

This is being called a watershed and I’m sure the “M” word — milestone — will pop up, too. But the true significance may be that a traditional media company took something that it does well in other platforms and found a way to make it a widely accessible online experience. The real milestone will be when we stop calling moments like this milestones.

USAT: Marketers spent about $100,000 for web packages, about one-tenth of the cost of a TV ad but nothing to sneeze at. Advertisers include Pontiac, Coca-cola, Burger King and Radio Shack.

MKTW: “At 12:40 p.m., with three games in progress simultaneously, the number of fans waiting to see first-round match-ups spiked to its highest level, with 4,000 people entering each minute and 20-minute wait times. … Shortly after 1 p.m., the waiting-room line was trimmed to below 49,000 as CBS scrambled to accommodate the surge in interest.”

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