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NCAA March Madness online: more revenue than Hulu and YouTube?

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March 4th, 2009

Media Week reports that CBS has nearly sold out all the ads for the online version of  March Madness, CBS's ncaa-on-demandfree on-demand access to the NCAA men's basketball tournament.   Media Week estimates CBS is pushing close to $30 million in revenue, significantly ahead of last year's $23 million.  If it hits $30 million it will up just over 30% in revenue year over year.

Combined with  the television coverage, which is expected to haul in numbers that are on par with last year's $430 million the online portion would represent about 6.5% of the total advertising haul.

I was set to write something that was fairly dismissive of the accomplishment, despite the growth, but it's fairly easy to be dismissive when comparing online video advertising revenue to television advertising revenue.

I started thinking about comparing it to other online video advertising and wound up sending the following e-mail to someone who is extremely more knowledgeable than most people (including me) on these topics:

I’m trying to form an opinion on what to think about CBS generating perhaps $28-$30 million in online ad revenue for its March Madness online on-demand.  On the one hand it’s pretty trivial compared to the TV dollars, and perhaps less than what CBS gets via its DirecTV exclusive, but on the other hand, it seems like it might be bigger than a month of revenue for Hulu and You Tube combined.  Is my thinking way out there?

It turns out that my thinking is not that far out there.   He said the main value in the CBS online inventory is that people can only watch some of the early round day games in their office, making the streams a substitute for a TV that would've otherwise been used, so those fans have no choice and that spells big money (online wise).

But not big enough to probably beat Hulu and YouTube combined.  Some of you might be surprised at what he said about that though:

It might not beat Hulu's [monthly] revenue, although it may be close, but it definitely beats YouTube's.

If you think about how the two services are used (and are familiar with using both) it shouldn't be a huge surprise that despite YouTube having a berzillion times as much traffic, video streams and visitors as Hulu, it's Hulu that has the better revenue stream.

 
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