MediaFile

March Madness: The great CBS experiment

Paul Thomasch

Mar 19, 2009 09:39 EDT

Get your brackets filled out, hand over a few bucks to the office pool manager, and settle in for some March Madness. The NCAA basketball tournament starts today.

Besides terrific basketball, the next two weeks will showcase what is a great paring of old and new media by CBS. Give the folks over at CBS credit, they’ve done a tip-top job of bringing the games to both your television set and your computer.

(In 1999, CBS acquired the rights to 11 years of broadcasting the tournament, paying about $6 billion. It also has the exclusive online rights.)

But this is where the big question comes into play. Will CBS’s first-rate online coverage cannibalize its television audience? And does it matter, particularly if advertisers are buying package deals? This is the sort of the thing media executives — worried about their own balancing act between old and new media — have been trying to figure out for years.

Here’s the Breakingviews.com take on it:

The growth of online video is similarly problematic for CBS. True, it owns the Internet rights to the tournament. And it expects online video revenue to increase 20 percent this year to $30 million. If the company can make extra money from online video while keeping its TV revenue steady, its not-very-lucrative rights contract could still turn into a moneymaker.

But online revenue could come at the expense of the company’s cash cow, its television business. Last year, the tournament averaged 10 percent fewer viewers than in 2004, according to Nielsen.