March Madness: CBS Already Ahead Of Last Year’s Sub-only Online Package

Last year, roughly 25,000 people paid $19.95 for live streaming of March Madness. It didn’t cover the cost of licensing the tourney from CBS (now owner of CSTV). This year, Larry Kramer, president of CBS Digital, tells Bambi Francisco, “We’re making money … By and large, we’ve covered our costs.” Revenue from 19 ad sponsors already has exceeded last year’s sub sales; that would mean they’ve taken in more than $500,000, a drop in the broadcast bucket but significant for digital.

— No one really knows what to expect in terms of users or bandwidth demands. Kramer’s prepared for 200,000 simultaneous users. That would be slightly less than the 214,000 Yahoo drew drew for Howard Stern’s last day at CBS, slightly more than the 175,000 simulatenous users for AOL’s Live 8 webcast. One difference: those were single-day events, not a multi-week tournament.

MKTW: Consultant Neil Pilson calls it a “watershed moment. … this is the first time that a significant national event — which is also covered on television — is being made available free, with the revenue stream coming from advertisers.”

NYT: Roughly 90,000 DirecTV subs picked up the March Madness lsst year for $49-59, more than tyhree times the number of paid online subs. This year, the larger number will be watching online but they’ll have to be observant: users will have five minutes every half-hour to acknowledge they’re watching or will be booted off, their place taken by someone in the VIP waiting room.

WP: Some companies and givernment agencies are disabling access to the live streams. Corporate Executive Board says employees not only would be distracted from work, but it could strain the computer network.