March Madness is the example par excellence for how premium sports content, aggressive marketing and interactivity (namely, bracketology and betting) can help sustain linear television in the era of on-demand programming.

March 21, 2019 | Hollywood

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Good morning. March Madness tips off at 9:15 a.m. PT on CBS with the #10 Minnesota Golden Gophers vs. the #7 Louisville Cardinals.

 

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How March went 'Mad'

 

Moving the Market: The NCAA Division I Men's Basketball Tournament, which kicks off today, is the example par excellence for how premium sports content, aggressive marketing and interactivity (namely, bracketology and betting) can help sustain linear television in the era of on-demand programming.

 

The Big Picture: The March Madness zeitgeist should be the envy of every media executive. Millions of consumers who usually do not care about the content (in this case, college basketball) transform overnight into engaged, passionate fans.

 

• The tournament is a national campfire. Its popularity a self-fulfilling prophecy. Consumers care about March Madness and the bracket because they are under the impression that everyone cares about March Madness and the bracket.

 

• "This is absolutely the biggest event of the year," Chad Millman, the chief content officer at Peter Chernin's Action Network, the sports-betting analytics site, tells me. "Our subscriber numbers are 254% higher today than they were on the day of the Super Bowl."

 

How We Got Here:

 

The March Madness bracket began in 1977 at a Staten Island bar called Jody’s Club Forest when owner Jody Haggerty invited customers to throw $10 into a pool and fill out brackets predicting the outcome of each game.

 

• The Jody’s Club Forest pool, which began with an $800 or $900 prize in 1977, rapidly grew in popularity until the purse totaled more than $1.5 million.

 

• The growing popularity of the sport, hastened by the late-1970s rivalry between Magic Johnson at Michigan State and Larry Bird at Indiana State, turned the tournament into a national storyline that transcended college basketball fandom.

 

ESPN, which launched in 1979, started covering the early rounds of the tournament the following year and started doing what's known as a "whip around," jumping from game to game in a precursor of today's NFL RedZone.

 

• In 1985, the tournament expanded to 64 teams, expanding the tournament's dedicated audience to at least 64 different sets of students and alumni and reinforcing the idea that this was a national event.

 

Where We're At:

 

• The tournament, while massively popular, is not totally immune to changing viewer habits. 35 million people watched the 1979 final between Michigan State and Indiana State. In the last five years, viewership for the final has fluctuated between 28 million (2015) and 16 million (2018).

 

What's Next:

 

• The legalization of sports betting, which is slowly expanding across the country on a state-by-state basis, is expected to carry interest in the tournament to new heights.

 

• "That's not anecdotal," Millman tells me. "All the studies show that people who bet on sports watch more games on television and they watch for longer."

 

• This will be true across sports, but especially for the tournament. "People are participating for the community component," Millman says. "Everybody is watching the same thing."

 

Bonus ... Millman's Final Four Picks: #4 Virginia Tech (East), #4 Florida State (West), #1 Virginia (South), #3 Houston (Midwest).

 

• "I go for immortality," he tells me. "I'm only thinking, what is the bracket I can create that is going to be unique and also be remembered."

 

Market Picks: #1 Duke (East), #2 Michigan (West), #1 Virginia (South), #2 Kentucky (Midwest). ... but in our heart of hearts we're rooting for #9 Washington.

🏀 Rally the Market 🏀

 

This Year's Only Storyline: "It’s Time for the Legend of Zion to Meet March Madness," by The Ringer's Brian Phillips:

 

• "The NCAA tournament has a way of creating folk heroes out of otherwise ordinary players. What will it do for [Zion] Williamson, who’s already the most captivating basketball player on the planet?"

 

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Tim Cook lands the Journal

 

Future of News: Tim Cook has secured The Wall Street Journal as a partner in the paid news subscription service — aka "Netflix for news" — that Apple plans to unveil next week, sources with knowledge of the matter confirm.

 

• The deal, which Apple is expected to unveil Monday, comes as The New York Times and The Washington Post hold out due to disagreements over revenue share.

 

• Apple is expected to charge around $10 a month for a subscription that will provide users with access to hundreds of news outlets. That's the same amount the Times and the Post each charge just for access to their content.

 

• Apple is also reportedly asking for a 50% cut of the revenue, though there's speculation that that figure is being floated to make Apple look more forgiving when it reduces the take to a lower figure like 30%.

 

The Big Picture, via NYT's Mike Isaac: "To persuade publishers to join the paid service, Apple executives have said the scale of Apple News, which is installed on every iPhone sold to consumers, could introduce millions of new customers to their content."

 

But ... "The deal’s terms have caused some publishers to recoil ... Publishers are also concerned that they won’t have access to important data about the consumers — credit cards, email addresses and other subscriber information — as part of the deal."

 

Bonus ... Apple has rolled out its second-generation AirPods. New features includes "50% more talk time, hands-free [Siri access]. and the option of a wireless charging case."

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Susan Wojcicki's Stadia win

 

Future of Views: I've written throughout the week about how Google's launch of Stadia is a landmark moment in the history of gaming. But The Verge's Vlad Savov points out that it's also crucial to the continued dominance of YouTube:

 

• "What if Stadia isn’t a case of Google aggressively entering a new business sphere, but rather a defensive one to protect its existing kingdom?"

 

• "YouTube has a practical monopoly on user-generated video online. It’s the birthplace of creative communities ... and the landing spot for a huge array of gaming-related videos. ... the place where the vast majority of gaming-related video ends up."

 

• "My thinking is that Google’s Stadia project is motivated, to a greater or lesser degree, by the desire to maintain its predominance as the home of gaming video."

 

The Big Picture: "From a gamer’s perspective, YouTube is the lever that Google will lean on to stir interest in its nascent game-streaming platform, but from Google’s point of view, the new game-streaming platform (hugely ambitious as it may be) is a necessary measure to keep YouTube where it is today."

 

The Bigger Picture: The engagement business — media, tech, commerce, etc. — always has one overarching objective: to keep you engaged.

Market Links

 

Mark Zuckerberg takes advantage of Amazon's weakness (Recode)

 

Jack Dorsey staffs up Square's new cryptocurrency unit (Fortune)

 

Guy Rosen wrestles with Facebook's Christchurch dilemma (WSJ)

 

Scott Stuber shuffles up Netflix's film leadership team (Deadline)

 

Bob Bakish suffers a stock drop in his war against DirectTV (Variety)

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Bob Iger's 4,000 pink slips

 

Talk of Tinseltown: Bob Iger's first job following the Disney-Fox merger will be cutting at least 4,000 jobs across the organization, according to sources familiar with the company's plans. It is an obligation that has cast a pall over the otherwise celebratory atmosphere surrounding Iger's landmark acquisition.

 

What's Next, via Deadline's Nellie Andreeva:

 

• "In [a] memo Iger sent overnight to existing and new employees ... [Iger] spoke of 'the challenging work of uniting our businesses' and promised that the company is 'committed to moving as quickly as possible to provide clarity' on the pending layoffs."

 

• "The memo reflects the mixed feelings among Disney employees today: relief that the protracted merger proceedings are finally over ... cautious optimism about the prospects of the newly bulked up Disney against the likes of Netflix, Amazon and Apple, and apprehension over the fallout from the integration process."

 

The Big Picture: There is a dark side to the age of consolidation, and it's about to be felt across the various levels of the new Disney-Fox organization at a scale rarely, if ever, seen in Hollywood.

 

Meanwhile ... On the bright side: THR's Pamela McClintock explains why Disney-Fox's combined film calendar is a "box office Death Star" ... while Redef's Matthew Ball offers "Nine Reasons Why Disney+ Will Succeed."

What Next: Things you couldn't script ... AT&T chief Randall Stephenson was interrupted by a robocall during his interview at the Economic Club.

 

See you tomorrow.

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