Turner to charge non-cable subscribers for March Madness online

March Madness is going over the top. Turner Broadcasting, which along with CBS shares the rights for the annual NCAA college basketball championship tournament, is going to offer its coverage of the event over the Internet at a price of $3.99.

The 64-team NCAA tournament runs about a month and ends in early April. The championship game often draws more than 20 million viewers.

Previously, people could watch games online for free via the NCAA's website. Games that CBS carries will remain available for free online. 

The move by Turner is aimed at consumers who do not subscribe to cable or satellite TV and those who do subscribe but whose distributors have not yet put in place a system to allow customers to watch cable content online.

Of the approximately 100 million cable subscribers in the country, about 77 million have access to a service known as TV Everywhere, which allows them to watch cable content on the Web provided they can verify that they're paying customers. But of those 77 million who can sign up for TV Everywhere-type services, less than half have enrolled.

The low price tag for the games seems aimed more at encouraging distributors to start marketing TV Everywhere more aggressively than to create a new revenue stream for Turner.

"We're honestly not going after cord-cutters," said Matt Hong, Turner's senior vice president of sports.

Still, if a few shell out some money to watch the games online, Turner won't complain.

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-- Joe Flint

Photo: Duke's Kyle Singler, right, fights Michigan's Zack Novak for a loose ball. Credit: Andrew Synowiez / US Presswire

Digital streams boost CBS profit in second quarter

Digital streams of CBS Corp.'s older television shows are trickling down to its bottom line.

CBS on Tuesday soundly beat analysts' expectations by reporting profit that more than doubled to $395 million, or 58 cents a share, for the quarter ended June 30. That compared to $150 million, or 22 cents a share, for the year-earlier period. 

Revenue for the broadcasting giant was up 8% to $3.6 billion. 

Analysts polled by Thomson Reuters had predicted that New York-based CBS would post earnings of 46 cents a share and revenue of $3.6 billion.

"Across every key financial metric, we turned in a stellar performance," CBS Chief Executive Leslie Moonves told analysts during an afternoon conference call. "At the heart of all this success is great content."

The company is capitalizing on its vast library of TV programs in an attempt to squeeze more money from older shows in the newly-created digital streaming window. This year it began negotiating deals for the streaming rights to its older titles -- including "Star Trek," "Frasier" and "Medium"-- with Netflix and Amazon.com Inc. 

CBS is profiting "without taking away from established revenue streams," Moonves said.

CBS does not make available its current hit series such as "Hawaii Five-0" and "NCIS" to digital streaming services. The company guards those programs to protect its ratings for network runs and the all-important advertising revenue that those ratings bring.

During the quarter, the company's entertainment division -- which includes the CBS television network -- saw its revenue jump 10%. The increase was driven by a number of factors, including the company's digital stream licensing agreement with Netflix, a cable syndication sale of the Kelsey Grammer sitcom "Frasier," and higher retransmission fees paid by cable operators and TV stations. 

The CBS broadcast network brought in higher advertising revenue in the quarter. The company also benefited in the quarter by sharing the costs of the NCAA basketball tournament broadcasts with Turner Broadcasting.  

The deal with Turner brings CBS less advertising revenue from the tournament, but lower production costs and higher profits.   

-- Meg James

Photo: Kelsey Grammer as "Frasier." Credit: Gale Adler / Paramount Pictures 

The Morning Fix: Disney's insider trading mess! SOAPnet out of suds. New boss at Hollywood Reporter

After the coffee. Before trying to get Lee DeWyze's awful version of "Beautiful Day" out of my head. 

Is this the plot for "Wall Street 3"? An assistant to a top Disney executive and her boyfriend hatched up a crazy plan to sell inside information about the company to hedge funds, according to the Justice Department. Bonnie Jean Hoxie was hoping to trade access she gained working for Zenia Mucha, the head of corporate communications for Disney, for ... a Stella McCartney handbag from Neiman Marcus. OK, she and her boyfriend wanted money too. This well-thought-out plot blew up in their faces with an FBI arrest. More on Hoxie and her boyfriend and their not-too-bright idea from the Los Angeles Times and Wall Street Journal.

Turn off the soap, kids are home. In other Disney news, the company is pulling the plug on its 10-year-old cable network SOAPnet and in its place will launch Disney Junior, yet another channel aimed at preschoolers. First lesson on the channel? Trying to trade inside information you get from working for powerful people is bad. Seriously, the channel enters a crowded marketplace, trying to compete with Nickelodeon's Nick Jr. and PBS Sprout. On the other hand, Disney has a way of just ramming these things down everyone's throat. Details on Disney Junior from the New York Times.

Business will be booming. Over the next couple of weeks, the broadcast networks will start selling ad time for the fall TV season. Many are anticipating a stronger market than in previous years. However, before you get all excited, keep in mind that although more money might be spent now for the fall season in what is known as the upfront market, that does not mean that overall spending on broadcast TV will go up. Anyway, the Wall Street Journal offers its preview of the mating dance between buyers and sellers. By the way, mating dance has become the most overused term to describe the upfront, and I will admit I'm guilty of it too. Can we come up with something new, like the annual polka between buyers and sellers? Ad Age, meanwhile, tells us that an improved economy means classier advertisers on this year's Super Bowl. Good, because I thought last year's 900-number chat-line spots were way over the top.

King's reign is over. The gradual decline of Larry King is picking up momentum. The CNN talk-show host has seen his ratings dip for years, and some might say that he is not exactly the most engaged interviewer these days. Also, while his rivals on Fox and MSNBC try to interview political news-makers, King often focuses on celebrities and crime stories. Those are, of course, easier to do and require less homework. Anyway, sooner or later CNN has to make a change at 9 p.m., but the network won't even discuss the idea. The New York Times looks at King's and CNN's woes.

Fuggedaboutit. HBO has taken issue with CBS hyping the link that two executive producers of its new drama "Blue Blood" have to the pay cable channel's classic mob drama, "The Sopranos." It's not that the producers didn't spend many years on the show and even won some Emmys, it's that they may not have the best relationship anymore with David Chase, who created "The Sopranos." CBS is backing off the promos, according to Vulture.

The Wrap doesn't like white people. OK, maybe that's an overstatement, but the entertainment website, whose biggest backer is Starbucks Chief Executive Howard Schultz (does it get any whiter?), goes to that old race chestnut and takes issue with both the stars of the summer movie season and recent winners of "American Idol."

Inside the Los Angeles Times: The Hollywood Reporter has tapped former Us Weekly editor Janice Min as its new chief. Turner Broadcasting sales chief David Levy thinks Conan O'Brien and the NCAA will translate to big ad dollars. Hard to disagree. Sen. Herb Kohl (D-Wis.) wants some tough conditions on the Comcast--NBC Universal deal.

-- Joe Flint

Just click here and let the magic begin: twitter.com/JBFlint

NCAA gets a big audience as window opens to shop for new TV home

People may love to hate Duke. But they also love to watch Duke.

Almost 24 million people tuned in to see CBS' coverage of Duke University barely beating underdog Butler for the NCAA college basketball championship Monday night. It was the biggest audience for the game since 1999, when 26.3 million people watched the University of Connecticut defeat Duke.

Even with a slightly later than usual start -- the opening tip for Monday's game was at close to 9:30 p.m. Eastern time -- the matchup drew 36% more viewers than the 2009 match between North Carolina and Michigan State and 23% more than the 2008 overtime thriller that saw Kansas defeat Memphis.

Overall, some 48 million viewers viewed at least some of the game.

The high numbers may have the NCAA thinking about its next TV deal. Its contract with CBS runs through the 2013 tournament. But there is a window that allows the NCAA to shop the tournament elsewhere now. If it can strike a deal that will pay better than what CBS is set to pay, the tournament could move.

But the odds seem long as CBS' $6-billion deal is structured in such a way that the payments to the NCAA grow dramatically over the next few years.

If the NCAA was serious about finding a new home, Walt Disney Co.'s ESPN would most certainly kick the tires. Less likely would be News Corp.'s Fox.

The strong ratings for this year's March Madness might also further encourage the NCAA to expand the number of teams from 64 to 96. If that happens, whoever has the rights would have to have a cable partner to carry such a load of games. CBS is already said to have had some preliminary talks with Turner Broadcasting about teaming up should the tournament get bigger.

-- Joe Flint

Photo: Duke coach Mike Krzyzewski offers counsel to his team. Credit: Andy Lyons / Getty Images