Free video with ads, iTunes to compete?

March Madness on Demand from CBS, which recently offered live video streams of games from the NCAA college basketball tournament, met with lavish success as users streamed the free content laced with ads onto their systems. The positive outcome is leading industry watchers to question whether consumers prefer free content with ads versus the more traditional pay-for-play strategy, such as the one employed by Apple's iTunes Music Store. iTunes charges $1.99 for music videos and shorts, and has met with unprecedented success in doing so. The CBS event resulted in over 1.3 million people signing up for the free service, who visited the site roughly five million times throughout the first three weeks of the NCAA tournament and viewed over 15 million live streams, according to CNNMoney.com.

CBS SportsLine said it had between 20,000-25,000 users viewing a similar offering during last year's tournament, when it charged $20 for viewing privileges.

"We obviously were fairly conservative in how we sold it and were really pleased with it. Clearly our advertisers got a bonus," said Larry Kramer, president of CBS Digital Media.

Filed under: industry
Other story tags: digital music/video