Can live sports streaming save Twitter?
Twitter is in trouble. Despite the fact that it’s still one of the most visible names in social media, the company’s user growth has largely stagnated.
When it reported earnings this week, the company warned that third-quarter sales would be far less than Wall Street expected as marketers appear to be funneling more of their social ad spend to Facebook and upstarts like Snapchat.
By any reasonable measure, it looks like Twitter faces an existential crisis, and some argue that the product is broken, perhaps beyond repair.
But if Twitter’s best days as a social platform are behind it, it might still have a chance at maintaining relevance and serving as a worthwhile marketing channel thanks to its investments in live sports streaming.
In April, the company announced that it had acquired the rights to stream the National Football League’s Thursday night games. Earlier this month, it live streamed the Wimbledon tennis tournament.
And this week, it forged a deal with MLB Advanced Media to live stream out-of-market Major League Baseball and National Hockey League games once a week, as well as a deal with Sky Sports to provide in-game Premier League highlight video clips.
As recode’s Kurt Wagner suggests, Twitter’s strategy appears to be quite simple: become television.
It’s quite a pivot, but one that could theoretically pay off. After all, marketing around professional sport is a multi-billion dollar business and if Twitter can become an online hub for live sports content, it will have a new way to get brands interested in its platform and bolster its sagging ad sales.
Already, the company is said to be asking $8 million for its top ad package for the Thursday night NFL games, and in all, Twitter could generate upwards of $50 million in ad sales from the NFL deal. Some of that money will ostensibly be shared with the NFL, but given that Twitter only paid $10 million for the rights to the Thursday games, it stands to be a profitable partnership.
Unfortunately for Twitter, it’s not clear that there’s a sustainable long-term business here. As Bloomberg detailed, Twitter got what looks to be a sweetheart deal on the NFL rights. The NFL admitted as much.
“We did not take the highest bidder on the table,” NFL executive Brian Rolapp explained. “[Twitter] is built around live events already. We want to see how they use the unique platform, and syndicated tweets all over the Internet is going to be interesting.”
In other words, Twitter can’t just pivot to become television. It’s promising that it has the potential to be more than television. And if the product is broken, as many suggest, that could be a very difficult promise for Twitter to keep.