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Paywalls imposed on March Madness

CBS, Turner to charge for select digital access

Time Warner and CBS Corp. are switching to a zone defense for this year’s multiplatform coverage of the NCAA men’s basketball tournament.

Some components of March Madness will require viewers paying a $3.99 fee in contrast to the free online access to all games that has been in place since 2006. For the second consecutive year, CBS and Turner Sports are splitting the 67 games, coverage of which begins March 7.

Hoops fans who want to watch games online that are scheduled to air on participating cable networks TNT, TBS and TruTV will need to provide a password confirming they subscribe to cable, satellite or telco services. Those hoping to watch the action on wireless devices like the iPad will have to pay the fee regardless of whether they have multichannel subscriptions or not. Subscriptions aren’t required to watch online any games live on CBS.

The paywall barriers are a reflection of the growing momentum behind the industry’s embrace of TV Everywhere, a movement to bolster the value of multichannel subscriptions that counts Time Warner CEO Jeff Bewkes as one of its biggest proponents. Cable operators and satcasters leaned on programmers to curtail the free availability of programming online in light of their new willingness to pay retransmission consent fees, a billion-dollar revenue stream that didn’t exist just a few years ago.

The paywall blocking mobile and tablet devices regardless of authentication is a reflection of how rights to TV programming typically work, with out-of-home viewing not technically covered under existing affiliate agreement.

Just last year, March Madness was made available on the iPad for the first time for free. However, this year marks the first time wireless availability will be extended to devices powered by Google’s Android operating system.

CBS and Turner may be gambling that even if paywalls lower the number of eyeballs that come to the games across platforms, they will still monetize those viewers at a higher rate than they would through advertising alone. Last year, March Madness averaged 2.6 million daily unique visitors and has reaped tens of millions of dollars in ad revenue in recent years, making it one of the most lucrative video experiences online in that time.

The paywall strategy isn’t unprecedented, however. CBS charged $15 for online access to March Madness for a three-year period beginning in 2003.

March Madness will be the highest profile test yet for the accessibility of the authentication experience, which has been criticized for not being user-friendly.

The strategic shift comes in the second year of a massive 14-year pact in which the companies ponied up an estimated $11 billion. The games, which was previously known as March Madness On Demand, have been rebranded this year as March Madness Live.

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