Our own version of March Madnesspost after post about making money/trying to make money off of college basketball. Today's installment: the 30 percent increase CBSSports.com 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 CBSSports.com 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. (CBSSports.com 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 $500,000not enough to cover the licensing cost for then-CSTV.com 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.
By Staci D. Kramer