This is not a new thesis. Credit would be given to the person who promulgated it, but the individual has been forgotten. So, so-and-so, hopefully will simply appreciate the appreciation here.
The astute analysis: how lucky Twitter is to profit from free content. Think about it. Twitter is essentially betting much of its future on serving as a hub for conversation about TV. And, not having to pay actors, production or acquisition costs for the source of its cash.
That TV content doesn't just help Twitter generate advertising in general, but can bring increasing interest from media companies who want to reach an audience that has the time and eagerness to tweet away about their favorite TV shows or sling barbs at ones they detest.
Twitter is the new water cooler. But, unlike the water cooler manufacturers all those years, it’s making money off serving as a platform to prompt TV arguments and love fests.
What will advertisers have to pay for promoted tweets or other Twitter ad products for a presence on pages ripe for commentary the second the final “Mad Men” episode ends next year? Or, to appear on relevant pages during the “Homeland” season premiere this fall as tweets about it blitz around in real time.
Then, of course, there’s that heavy tweeting during the Super Bowl. Yes, about the game, but more notably the ads, which are considered content that one night a year. So, Twitter makes money by selling advertising reaching an audience commenting on advertising.
This huge consumer base to monetize and no cost for the content. Oh, how cable operators, DirecTV and others would relish that. They continue to complain about the rising costs of carrying the broadcast networks and paying for sports rights. Twitter doesn’t owe AMC or Jon Hamm anything.
Twitter might not have it so good if this were 1993 or 1983. But, the site happens to have come along during what some have called the golden age of TV. Clearly, the boom in original cable programming has helped usher that in and with Netflix and Amazon now getting into the production game, the era might not just continue but get even more plaudits.
Twitter has also had the good fortune of emerging in the age of the tablet and smartphone, which grease social media. Last month, a top Twitter executive said 95% of social-media conversation about TV takes place on the site. Yes, the statistics citer Jean-Philippe Maheu works there, but even if the figure were 10%, there’s big money to be made. (To be sure, TV conversation isn’t exactly hurting Facebook either.)
Twitter is not just making money off ad dollars generated by TV commenting, but selling access to information about the conversations the content sparks. A recent deal not only has Starcom MediaVest Group getting access to preferred inventory, but access to proprietary Twitter data, which has at least two potential benefits: a chance to better target ads on Twitter and gain insight into which shows and ads generate opinions that could help in media planning and targeting. (Twitter can offer data about opinions on advertising in real time as it tracks some 58,000 ads a day.)
Those that don’t trust Nielsen may find a way to use Twitter as a proxy for ratings. At least for, say, a demo of women 18-to-34 who love “Gossip Girl” enough to praise the fashions online, which of course might make them more likely to buy the clothes.
Oh, and speaking of Nielsen, the measurement company is set to launch a Nielsen Twitter TV rating. Wonder who Nielsen is paying for the data that propels the service?