Cover Story: Multimedia Madness

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 Madness, it seems, comes in many forms.

In March and early April, it means people painting their faces or bodies in the colors of their alma mater or waving foam fingers for their favorite squad, all over the NCAA Men's Division I Basketball Tournament, more colorfully known as "March Madness."

Rights-holder CBS has also gone a little mad, offering the tournament's 63 games this year on more screens and in more formats than ever before, extending March Madness past traditional game coverage on linear TV and radio, to tourney action and highlights on CBS College Sports Network and out-of-market pay-per-view packages in HD on DirecTV. Advanced services are also in play, with games streamed live online. An on-demand highlights and memories package is accessible to video customers from 20 distributors. No TV or computer? There are mobile offerings on iPhone and iPod are now available, plus AT&T and Verizon Wireless video products.

But there is a method here. By offering varied means to the Madness, CBS News and Sports president Sean McManus believes his network is poised to capitalize on the demand for hardwood heroics.
"With the tough economic times, I think Americans are ready to jump up out of their chairs and cheer for something," McManus said.
"We used to bring our cameras, shoot some basketball games and go home," he said. "Now, there are myriad new ways that we're trying to maximize revenue."
Basketball fans and media observers have taken notice of CBS's full-court press.
"Initially, when CBS made the deal back in 1999, it was widely viewed that it vastly overpaid," said LHB Sports Entertainment and Media principal Lee Berke. "But CBS rolled out different platforms in a logical way, and now you can say that this is the case study on how to exploit a major sports property."
NBC also showed last year, with the Beijing Olympics, that events running on numerous broadcast and cable channels and online can still aggregate a huge TV audience: 211 million across NBC Universal channels.

For $6 billion, CBS gained TV and new-media rights, most of which were a gleam in a technologist's eye at that stage, over an 11-year pact that tipped off in 2003 and extends through the 2013 school year. The contract is valued on an escalating basis - this year's outlay is reportedly $571 million. Couple that with hundreds of millions in production and development costs, and it's a big bet to cover, even for a property that many argue is the most exciting in all of American sports.

"If you quantify everything we get in value, whether it's promotional, the advertising revenue we get on TV and the Internet, what it does for CBS College Sports and now mobile, plus the corporate partner program and radio and the other NCAA events we get," said McManus, "add everything together and it's a deal we would do again that's financially good for CBS."

Ad revenue has grown over the years -- TNS estimated 2008 tournament ad sales at $643 million -- but is challenged this go-round by the faltering economy. With a little more than a week to go before the tournament's March 19  tipoff, CBS had sold about 90% of its inventory. And while it's too close to call, many media executives consider little or even no growth to be a sign of strength in such a down economy. More than anything, the sales figures already reveal the enduring power of college sports - authentic athletic competition without the attitude of pro players and owners.

On the down side, though, media buyers report CBS has been at that 90% sell-through level for a number of weeks, with units remaining in the high-profile and priced Final Four and national championship game, which this year takes place at Ford Field in Detroit.

 CBS executive vice president for sports sales and marketing John Bogusz said that with a solid group of NCAA and returning sponsors and surprising strength with the auto category, the network has overcome financial sector defectors to some extent. CBS was also buoyed by growth from the "March Madness On Demand" Internet package of games, with sales expected to surpass $30 million in just four years. "Given the economy, we're at a good level," Bogusz said.

Herewith a scorecard on where CBS stands with ad sales and the various Madness media, old and new, of March.

BROADCAST TV: CBS Sports
While noting that no sector is "immune to the economic downturn," McManus called sales for the tournament  "a pocket of good news" in a tough ad environment.

The network was at 90% of its ad-sales goal in the middle of last week, with some units still available in the earlier rounds, according to buyers. Bogusz said there's limited inventory left in the Final Four and national championship games.

"I'd say that's about accurate. The tournament's a great place to reach men in general and young men in particular," said Carat vice president and group director of national broadcast Mike Law. "They have NCAA corporate and returning sponsors in place, so there's a good base. But they've been at that level for a while now."
Miraj Parikh, video innovation director at media agency Spark, agreed. "It's been 90% or so for a long time. They should be at 99% by now," he said, noting that CBS typically holds an estimated 5% to 8% of inventory in reserve for audience deficiency units in case the tournament under-delivers. "If they exceed ratings expectations, you're talking 8% to 12% of inventory. Buyers could see some opportunities."
Thus far, ad rates have held up reasonably well. Pricing for the championship game is anywhere from $1.1 million to $1.3 million per 30-second spot, according to sources, with the Final Four fetching $450,000 to $750,000, depending on whom one asks.
Early-round entry is less pricey. "For $2 million, you can have a good presence on that first Thursday and Friday," said Parikh.
Neither McManus or Bogusz would discuss whether CBS would match or outpace last year's ad sales, which TNS estimated at $643 million, a figure most believe is somewhat inflated.

Bogusz said the financial category has been a problem. "We've lost AIG and Wachovia," he said. "We're trying to make up some of that. The movie category has been good. Tech is up."

CBS has also received a lift from the autos. Mercedes, Toyota/Lexus and Audi, a new sponsor, have joined troubled General Motors, which did not advertise in the Super Bowl or Academy Awards, on the network's roster.
"I find that interesting in terms of the auto marketplace overall," said Bogusz.
In addition to GM, AT&T and Coca-Cola are sponsors at the NCAA corporate champion level, while Enterprise, The Hartford, Lowe's, State Farm, Starwood Hotels and newcomer Hershey are at the partner level. All are contractually obligated to express media in the tournament.
Still, the CBS Sports sales chief knows there's a long road ahead to the Final Four. "I'm not going to make this all rosy. It's a challenge out there, but we're getting things done. We'll be in sale the next three weeks," said Bogusz.

SATELLITE TV: DirecTV's Mega March Madness
In what was the first play to move tournament coverage past linear TV and radio, CBS Sports has been partnering with DirecTV for a decade now on its exclusive Mega March Madness out-of-market pay-per-view package.

Available for $69, the 2009 version will proffer 37 tournament games in HD, supported by an interactive mix channel showcasing four contests simultaneously, according to DirecTV Entertainment executive vice president Eric Shanks. Subscribers choosing a game from the mix channel will automatically be directed to that game's enhanced feed if they have an HDTV set, or to the standard-definition feed for traditional set owners.

While watching any game, fans can also call up an on-screen "L-wrap" to see scores from other games in progress and cycle through all the current-round matchups. Subscribers can also enter their tournament brackets into the computer, which will be automatically updated after each game ends.
DirecTV has been touting the service via national TV buys and will receive a promotional assist from top college coaches, Louisville Cardinals' Rick Pitino, Memphis Tigers' John Calipari, Tennessee Volunteers' Bruce Pearl, Washington Huskies' Lorenzo Romar and Oklahoma Sooners' Jeff Capel. They will appear on Bracket Breakdown, premiering on DirecTV's 101 Network March 16.
"We really believe in a unique, differentiated content experience for our DirecTV customers, so making this show available for all customers is just a benefit of being a DirecTV customer and drives awareness of the package," he said
Shanks would not share Mega March Madness numbers from last year or project subscribers for this year's package, but did concede that CBS Sports' s free streaming of tournament games via March Madness On Demand has adversely impacted buys.
"It definitely hurts the package, but the pay package is still a great value to tournament fans," he averred. "You can't get HD on the Internet, and it's still tough to circle 12 to 15 guys around a computer screen."
On the ad side, DirecTV reports a 17% uptick in revenue from the commercials it sells and inserts within the two to three local minutes per hour, held by CBS stations. The satellite service's ad roster includes Warner Bros., insurance company Geico and online stock broker E-Trade.
Shanks said the network will have to take a close look at the package -- which sources say expires in 2010 -- when it comes up for renewal..
"When the time comes we'll have a discussion regarding the renewal and we'll take a look at it," he said. "Depending on everything else that's going on, if there's value to having the package, the answer is [we'll renew]."

CABLE TV: CBS College Sports Network
When America tunes in CBS on Sunday at 6 p.m. for the NCAA Championship Selection Show, Steve Herbst, general manager of the 30-million home CBS College Sports Network, will be among those taking a very close look at the brackets.
"I'll be a couple of steps behind and to the right of [CBS Sports executive vice president of programming] Mike [Aresco], not to get in his way," joked Herbst, whose network will get a pair of tourney first-round, out-of-market games for a third consecutive year. "I'll be standing nearby, to see what he has in mind for us at CBS College Sports."

But that's not the only tournament calling card for the network, which gets to lift its game before an additional 20 million homes, during a free preview from March 13 through April 7. During that span, CBS College Sports will showcase its stuff, including 75 hours of tourney fare, much of it under the heading of NCAA March Madness Highlights powered by Pontiac, the tournament's official highlights show, before 50 million households.

Among the top affiliates taking part in the preview, which in many cases, upgrades the service from a sports tier to digital basic: Dish Network; Insight (across its footprint); Bright House Networks (Detroit, Indiana, Birmingham, Ala.); Verizon FiOS' Bend Broadband; Blue Ridge; MidContinent (North and South Dakota); Charter Communications (St. Louis and Ft. Worth, among others); Cox Communications (Tulsa); Sunflower Broadband; Grande Communications (Wisconsin); Comcast (Seattle, San Francisco Sacramento, Memphis); and Time Warner Cable (New York City, Los Angeles and Texas, among many others).
"The free preview is going to put us before 50 million homes. We're going to have analysis, the highlights, live cut-ins and the practice sessions for the Final Four teams in Detroit," said Herbst. "The tournament is going to be a great showcase for our talent and network."

ON DEMAND:  NCAA VOD: The Best of March Madness
CBS College Sports is also doing its part to give some 20 cable, satellite and telco affiliates -- including DirecTV, Comcast, Verizon, Charter, Mediacom Communications, Insight and Atlantic Broadband -- an assist with on-demand tournament action.

Produced by CBS Sports, CBS College Sports Network, the NCAA and Thought Equity Motion, the "NCAA VOD: The Best of March Madness" package comprises advertising-free customized highlights for the 63 tournament games, plus 40 archival vignettes, in both standard and high-definition formats. Extending last year's window, the content -- some of the tournament memories became available March 2 -- will run through April 30.

Last year, CBS College Sports executive vice president of distribution Bob Rose said, 25 memorable moments yielded about 75% of the on-demand viewing.
"That's about right," said Comcast vice president of video content Diana Wechsler Kerekes. "We were just watching Christian Laettner's shot [from the 1992 Duke-Kentucky thriller] and you get excited. I think the memories, which we've had up since March 2, really get people pumped for the tournament."
It's a ratio that figures to increase given the expanded vignette slate, which this year includes the 30th anniversary of the Magic Johnson-Larry Bird final and Mario Chalmers' game-tying three-pointer for Kansas in last year's title-tilt triumph over Memphis. CBS College Sports and CBS college basketball analysts Seth Davis and Adam Zucker provide intros and context for the memories.
As for game action, a highlights package will be culled from the tourney's first four days. Thereafter, from the Sweet 16 regional semifinals through the national championship game on April 6, there will be individual cutdowns, averaging three minutes. That on-demand content becomes available, via TVN, to distributors the next morning.
Rose, who said the network has engaged the NCAA and operators in conversations about similar year-round opportunities, said on-demand fare is a differentiator that can drive distributors' businesses. He wouldn't discuss financial terms, but noted "it doesn't come free. But there's a good value equation that everybody's looking at."
As for affiliates, CBS College Sports provides all partners with customized spots, Web banners, ad slicks and barker channel touts from Davis.
"We heard our affiliates loud and clear that their priorities are HD, VOD and compelling content to distinguish themselves from the competition" added Ellen Schned, senior vice president affiliate marketing and distribution, CBS College Sports".
Affiliates are also touting the on-demand tourney package on their own. "We're using cross-channel, the I-guide, banners on Comcast.net," said Kerekes. "Comcast is really leveraging its resources to let people know about this great product and cool event."

ONLINE: March Madness on Demand
CBS's March Madness On Demand will stream all 63 games live again this year.
For the 2009 tourney, MMOD action also comes in high-definition, via the enhanced video player from Microsoft Silverlight, which handled NBC's online Olympics coverage from Beijing and provides treble the resolution of the Windows Media Player

Comcast, through a deal secured by media agency MediaVest, will sponsor the "boss button" function. No Comcast COO Steve Burke's face is not the icon to trigger the MMOD application. But users clicked on the button 2.5 million times during last year's tournament to make it look like they were working on a spreadsheet. This year, Kerekes viewers will be taken to a spreadsheet, replete with tournament schedule information and data.

"This is the first time the boss button was sponsorable," she said. "We think it's a valuable application and wanted to attach our brand to it."
Jason Kint, CBSSports.com senior vice president and general manager, said MMOD attracted 4.8 million unique visitors last year, a 164% jump from 1.8 million in 2007. About 90% of that occurred in the workplace, said Kint, underlining the boss button's appeal.
All told, users consumed 5 million video and audio streams in 2008, an 81% leap from the prior year. The proliferation came as the network -- in keeping with CBS Interactive's strategy of pushing premium content out to the Web -- made entry to CBSSports.com and NCAA.com available sans registration requirements through the likes of MySpace, Yahoo Sports and ESPN.com.
This time, Kint's final bracket has MMOD expanding its base of unique visitors by half to around 7.2 million. His projections are based in part on the acquisitions of CNet and GameSpot, which has pushed CBS Interactive into the top 10 on the Web with 220 monthly uniques, according to Commscope, and the attendant promotion for MMOD on those and other properties. Moreover, he said MMOD will be accessible from 300 sites this year, up from 200.
"The number of distribution points is increasing significantly and the awareness of the product grows every year," said Kint.
So does the ad revenue. With 30 to 35 advertisers in tow, March Madness On Demand is expected to pass the $30 million mark, a 30% jump from $23 million for the 2007 tourney and $10 million in 2006.

TELEPHONE: iPhone, AT&T, Verizon
CBS Sports is also into mobile Madness, taking the action to handhelds, via an application for Apple's iPhone and iPod Touch devices that will provide live streaming video and audio from the tourney's 63 games.

Developed by MobiTV, the mobile application is available for $4.99 from Apple's App Store on iPhone and iPod Touch, or at www.itunes.com/appstore. Those only interested in the action from Ford Field can purchase those games for $1.99 a piece, the day after the buzzer sounds.

Besides live video, the NCAA March Madness on Demand iPhone and iPod touch application lets fans access tournament brackets - updated in real-time with up-to-the minute scores - and click directly from brackets to live video. During the contests, users can access in-game box scores and player stats, as an overlay on top of the video. The service also will highlight CBSSports.com's Edge Matchup game previews, including team breakdowns and head-to-head comparisons.
The Apple apertures aren't the only mobile gambits for CBS, which also sank a deal with AT&T to carry the complete tourney schedule on all of its Mobile TV packages for free.
AT&T, which provides live TV packages starting at $15 per month, through Qualcomm's MediaFLO subsidiary, will have a quartet of live TV channels dedicated to the tourney in more than 50 metro markets. The tourney action will be available on four handsets: LG Electronics' Vu and Invision, and Samsung Electronics' Eternity and Access.
The telco is running a promotion tied to March Madness offering two months free mobile TV service.
Competitor Verizon Wireless is also in the game with MediaFlo's live TV service and will offer a single March Madness channel, with either an East or West coast feed, depending on the customer's market.
"We're providing multiple ways to experience the content," said Jeff Sellinger, CBS Mobile executive vice president and general manager.

RADIO: Westwood One, Sirius, MMOD
On the radio, syndicator Westwood One, which sublicenses tournament rights from CBS, will provide full play-by-play coverage of 29 games. The schedule includes action from all eight first-round sites - via five broadcast windows on the hectic two opening days - and second-round sites and four select regional semifinals. Coverage extends to all four regional finals and all three games from the Final Four.

Westwood One vice president, executive producer for sports Howard Demeroff said the games will be available terrestrially on about 450 stations nationwide.

In addition, all of the tournament games will be broadcast in their entirety on Sirius Satellite Radio, as well as on March Madness On Demand. "There's a built-in radio button on the player, so you can hear us," said Demeroff, noting that the audio feeds are closer to real time than video (owing to satellite-delivery lags).
Last year, MMOD audio clicks grew 42% to 870,000 for the tournament, up from 605,000 in 2007, with hours jumping 53% to 95,000 from 62,000.

FUTURE MADNESS
While it holds rights through 2013, CBS is beginning to eye an even longer view of the tourney. McManus, noting that CBS is in contact with the NCAA on some level virtually every day, said "we talk about making the tournament more marketable for the NCAA and more profitable for CBS. I think sometime within the next year, we'll sit down and have some informal discussions. If a deal makes sense, we certainly would like to keep it." (The NCAA has the right to opt out of the contract following the 2010 tourney.)

Asked if CBS has the right to match another offer, McManus said: "We're protected in our contractual language."

Consultant Berke anticipates that ESPN/ABC and NBC Universal would have interest in the property in all its bundled forms, should it become available. Fox and its FSN regional sports networks were also in the hunt last time.

"I think you're looking at somewhere between five and 10 years. "You need the time to fully leverage the property and new ideas," Berke said.
As part of the deal that netted CBS the men's basketball tourney rights, CBS gained access to 89 other college sports. The NCAA also sold the rights to 21 other championships, including the women's basketball tournament, soccer and lacrosse, to ESPN for a reported $200 million. That was in the days before Black Rock had a college network arm and the behemoth in Bristol had launched ESPNU.
"Those rights would be something that could really help build CBS College Sports," said sports consultant John Mansell.
It's a point not lost on McManus.
"If we had CBS College Sports then, it would have been a different equation," he said. "When those rights become available, I think we'll have a different view of the value of those sports."
And at that point, a different kind of madness, may ensue.

Todd Spangler and R. Thomas Umstead contributed to this report. For more on CBS's March Madness play, please visit Multichannel.com.

NET GAINS
Growth estimates for NCAA Men's Basketball Tournament network-TV ad revenue, by year:
Year Total Ad Spend ($ Millions) * Total Audience (Millions)**
SOURCE: *TNS Media Intelligence; ** Nielsen Media Research
2000         310                                      140
2001         310                                      133
2002         348                                      137
2003         362                                      122
2004         436                                      120
2005         468                                      142
2006         497                                      129
2007         520                                      133
2008         643                                      132

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