March Madness: Closing In On $30 Million In Ad Rev

imageOur own version of March Madness — post after post about making money/trying to make money off of college basketball. Today’s installment: the 30 percent increase expects in ad revenues for NCAA March Madness On Demand. Last season, ad-supported MMOD included all of the games for the first time and revenue jumped some 130 percent to $23 million from $10 million in 2007. This season’s increase puts within range of $30 million in ad revenue — $29.9 million, from presenting advertisers *AT&T*, Coke and Pontiac and more than two dozen others. ( says most of that revenue comes from video ads in the MMOD player but won’t break out percentages.)

Put another way, it’s a heck of a jump from north of $4 million in 2006, the first year CBS (NYSE: CBS) offered free, ad-supported access. And it’s a heck of a lot more than CBS was pulling down from its previous subscription-only offering: roughly 25,000 people subscribed in 2005 at a cost of $19.95, a total of about $500,000 — not enough to cover the licensing cost for that year. (Those are the numbers provided by CBS in 2006; a current fact sheet says “between 2003-05, NCAA March Madness on Demand was a subscription product with an average price of $15. In 2005, approximately 20,000 users purchased MMOD.”)

Sounds impressive and it is, especially as a standalone number. In context, though, we’re back to the same issues that face most digital offshoots of traditional media: the money being made wouldn’t be possible without the $6 billion being spent by parent CBS for NCAA rights and it doesn’t come close to replacing the television advertising income. Luckily for CBS, it doesn’t have to for now.