CBS Sports gets March Madness right

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For the third year in a row, CBS will make its broadcasts of NCAA basketball tournament games available free on the Web. The biggest difference this year, though, is that it will make *all* the tournament games available online (except for one opening-round game on March 18). There will be no local blackouts, and every round will be online, even the finals. The move acknowledges something that seems obvious: the Net doesn’t cannibalize the broadcast TV audience. No one who could watch the game on a TV set would choose to watch it on a PC -- there’s no interactive feature compelling enough to drive viewers out of the living room (or sports bar). As CBS chief Les Moonves told financial analysts last month, according to Online Media Daily, the ‘Internet audience is additive to our core audience.’

It’s also additive to CBS’ advertising revenue, more so every year as it peels away restrictions on its webcasts. The network estimated that it would collect more than $21 million in ad revenue from ‘March Madness on Demand’ this year, up from $9 million last year. Given that it’s paying the NCAA about $550 million a year for the rights to the tournament, that’s not a showstopping amount of money, at least not yet. But with the cost of raw bandwidth declining every year, the growing ad revenues translate into increasingly healthy profits for the venture.