• by Ben Chardell , August 2, 2016

In recent years, Twitter has faced two very interesting, and very different (but not unrelated) problems. First, content created and initially posted on its website and app is being used nearly universally for free in all forms of media and by marketers globally.

You can’t flip on a TV for more than 30 minutes without seeing some kind of Twitter integration, and it feels like practically every blog post these days has at least one Tweet embedded. On top of that, Twitter is the de facto social network for live commentary, giving it a sort of reciprocal relationship with live broadcast with no remuneration to Twitter.

The second issue is simpler, but incomprehensible when considered along with the first. How is it possible one service could so deeply saturate all of media, and still fail to generate enough revenue to satisfy investors?

As it happens, solving one problem may directly solve the other.  Twitter’s recent expansion into the world of live streaming looks on its face to be an effort to capitalize on its inclusion in broadcast media to bolster revenue, and to turn investor frowns upside down.

This spring, Twitter secured a deal with the NFL to live stream Thursday Night Football games, followed by deals with the MLB and NHL to live stream one out-of-market game per week; and more recently, Twitter partnered with CBS to stream both the Republican and Democratic National Conventions. These deals come after Twitter’s partnership earlier this year with the NBA to stream 360-degree videos of the NBA finals games. In each case, Twitter is attempting to serve consumers already interested in this content, in hopes of owning their viewing and commenting experience end to end, instead of just in pieces.

Facebook, Instagram and Snapchat users on average spend longer on those platforms than on Twitter.  With their step into live streaming, Twitter is betting big on live games and entertainment events and the conversation their users will have around the events – incentivizing users to stay on the site for longer than usual.

Though Twitter will still be competing with an entire industry of well-established options for watching sports, more live streaming content equals more advertising opportunities and, eventually, more money. On the property side of things, it was a no-lose situation for the NFL to strike a deal with Twitter, as it would only generate more exposure to the TNF games that do not do especially well in ratings to begin with. It’s true that it is an experimental deal for both sides, but Twitter has the most to lose.

Twitter will be streaming the same games that networks, such as NBC and CBS, are already producing and airing on live TV, but while those media corporations reportedly paid as much as $450 million for the rights to these games, Twitter was said to have paid only $10 million in its deal. Since Twitter does not own the rights to these games, it might be limited in the types – and number – of ads that will initially run.   Depending on how deals are structured, Twitter could be limited to selling pre-roll and in-feed inventory, versus selling full pods of video ads during the typical commercial break. 

Sports were an obvious first step for the platform, given their live nature. They’ve often dominated Twitter feeds in the near decade since the company launched. With more and more consumers cutting cords, this move to live streaming on social media opens the door to a whole new watching experience – an attractive no-strings-attached set up for millennials and potential new or lapsed Twitter users.

It will be interesting to follow how this service offering unfolds for the social media app. The DNC and RNC partnerships position Twitter to benefit from an entirely new category of viewing, and it becomes easy to imagine expansion to any sort of “appointment viewing,” i.e., the Oscars and other award shows. In an industry that has felt the impact of DVRs, Twitter could breathe new life into the idea of watching television content live.

And while the nitty-gritty details of the first advertiser deals have yet to be released, it’s expected that official league sponsors will get the first opportunities to test this platform in a category exclusive manner.   

If Twitter can assert ownership over the live viewing experience, and offer brands a new and impactful way of connecting with consumers, we may see a new media landscape in which the first and second screens merge into something entirely new.