Twitter has been dealing with sluggish user growth for some time. As such, over the last year, since it brought back Jack Dorsey as CEO, the company has been experimenting with various ways to solve this sticky problem. One idea has involved signing some high-profile live streaming deals—including the NFL, CBSN and Bloomberg—and streaming content directly on Twitter.
Twitter understands its loyal user base loves to talk about politics, sports and the stock market. It is betting that by streaming content from these different content owners, it can attract new audience that hadn’t used it before who will presumably also join the conversation—at least that’s the theory. The fact is, however, that Twitter is not exactly the first place you think of to watch a football game or get stock reports from Bloomberg, but it is hoping to change that perception, and in the process begin to grow that stagnant user base.
What’s the strategy here?
On its face, it could be difficult to tease out the end game here. If everyone who uses Twitter is already talking about live events on the network, how is streaming content directly going to give them any additional lift?
It certainly a question that baffles Dan Rayburn, an analyst at Frost and Sullivan, who has been covering the streaming media market for years. “Obviously they have a strategy, but I don’t know what it is. I don’t get it. Twitter isn’t a place people think of for long form content,” he said. In Rayburn’s view, simply getting a deal to stream content won’t necessarily achieve the desired goal. “Just because they license content doesn’t mean people will go to see it,” he asserted.
Twitter obviously has a different spin, seeing live-streaming video as a strong adjunct to the real-time nature of Twitter. “In the past, the conversation has happened on a separate screen from the event itself. What we’re doing now through live-streaming video, both in Twitter and Periscope, is bringing the event and the conversation together on a single surface,” Twitter wrote in its Q1 2016 letter to shareholders (pdf) last April.
Meanwhile, the company has continued to expand its partnerships, announcing deals with 120 Sports, Campus Insiders, Major League Baseball, the National Basketball Association, the National Hockey League and the Pac-12 Networks, in addition to the other previously announced partnerships.
Still an experiment
Twitter admits these are early days and it’s still tinkering with the best ways to deliver the live streaming content. In fact, in June it purchased Magic Pony, a startup that uses machine learning and visual processing technology to improve image delivery, especially on mobile. Twitter is hoping it can incorporate the technology into its streaming system to help deliver higher-quality streaming video at lower bandwidth, and in the process, improve the mobile viewing experience. This is particularly important because Twitter sees cord cutters and people on the go as prime candidates to access this new streaming content.
One of Twitter’s early streaming partners, CBSN decided to experiment with simultaneous streaming of the Democrat and Republican conventions on its site and Twitter. Christy Tanner, SVP and GM of CBS News Digital says the results were quite good with the network reporting a record 13.85 million streams during the two conventions. Although she didn’t break out the numbers, she did say broadcasting in both places resulted in a larger audience. “We did not see cannibalization by simultaneously streaming on Twitter and we were happy to reach a wider audience to create a deeper connection between our coverage and the voice of the audience,” she said.
Unfortunately, beyond that nobody is really talking about how Twitter plans to measure the success of the new content. “How do you judge the success [of live streaming] for Twitter. You can’t unless you have analytics they provide and if they don’t, we’re just left scratching our heads,” says analyst Rayburn.
Regardless, for Twitter, this is clearly part of a larger plan to solve the entrenched audience growth problem that has dogged the company for some time. In the process, it hopes to transform the business and revenue via advertising, but streaming live content alone is no guarantee of financial success, and only time will tell if the strategy is sound or not.