Extra games and wider access to coverage of the NCAA men's basketball championship (also known as March Madness) on smart phones and tablets could increase workplace distractions that threaten to sap employee productivity during the annual three-week long tournament, according to consultancy firm Challenger, Gray & Christmas, Inc.
Total online viewership during work hours is likely to reach at least 8.4 million hours during this year's tournament, Challenger said.
Assuming average hourly earnings of $22.87 among private-sector workers, Challenger expects the financial impact of the 8.4 million hours to exceed $192 million.
NCAA men's basketball championship tournament begins on March 15 with special qualifying games. This year, the NCAA basketball tournament is expanding to 68 teams. Four first-round games will be played on Tuesday and Wednesday, March 15 and 16 to determine the final teams added to the 64-team bracket that begins play with the second round on Thursday, March 17.
The Challenger estimate is based on 2010 March Madness on Demand traffic statistics from CBSSports.com. Last year, the online streaming service attracted 8.3 million unique visitors, who enjoyed a total of 11.7 million hours of online video and audio (an average of about 1.4 hours per visitor). That was up 36 percent from the previous year.
According to CBSSports.com, 8.7 million hours, or nearly 75 percent of the total, was consumed in the first four days of the Tournament. About 80 percent of the four-day total was achieved in the first two days, based on the fact that 3.4 million hours of March Madness on Demand was streamed on the first day of the tournament alone.
With CBS Sports expanding its reach this year by providing free mobile apps, Challenger conservatively estimates that streaming will increase at least 20 percent in 2011 to about 14 million total hours. Assuming similar viewership trends will occur this year, roughly 10.5 million hours of streaming video and audio will be consumed in the first four days of the tournament, with about 80 percent of that (8.4 million hours) occurring on Thursday and Friday.
At first glance, 8.4 million hours of lost productivity seems like it would deliver a crushing blow to the economy. However, it is important to remember that there are roughly 108.3 million people on private payrolls, each working an average of 34.2 hours per week, according to the latest Labor Dept. data. So, the total number of hours worked by the American workforce in one week comes to about 3.7 billion hours, Challenger CEO John Challenger said in a statement.
Over the three weeks of the tournament, the nation's 108 million workers will have logged more than 11 billion hours of work. The 8.4 million hours lost to March Madness is a relative drop in the bucket, accounting for less than 0.07 percent of the total hours American workers will put in over the three weeks of the tournament, he added.
However, for an office with 50 to 100 workers, five or ten people streaming basketball games will definitely have an impact on everyone else's Internet speed, Challenger said.
Last year, Challenger estimated that lost productivity would cost employers $1.8 billion in lost wages paid to unproductive workers. This year, the firm did not reach the same conclusion due to a lack of updated market research and statistics.
This year, we simply did not have enough information to support what is already a very rough estimate. In the end, however, we have already seen that the impact to the overall economy is so minute that it should not cause any concern. What is more important is how individual companies address the issue among their employees, said Challenger.