EC 3 Keys To Twitter's Turnaround

3. Streaming (i.e., Live) Video

Twitter spends close to a billion dollars a year on infrastructure and has experimented with video (including 800 hours of live video in 1Q 2017). It has correspondingly experienced both successes (live gaming events) and failures (live NFL events). But we'd like to see Twitter expand on this effort and formalize both programmed and on-demand video feeds, tied both to users and to verified brands (e.g., Premier League, CNN, FOX, ESPN, etc.). 

Video, perhaps more than any other offering, delivers a solid opportunity for embedded advertising. Users can already share video links, just like news stories, but those links connect to external sources. Here, we're talking about channels delivered via Twitter, most likely to mobile users, with the added value of engaging socially (the first AND second screens combined). It's recent announcement with Bloomberg, to offer 24x7 streaming news through Twitter's platform, is a sign they are moving in the right direction (now to see if they effectively channelize the offering and can bring on additional content partners).

Interestingly, Snap (NYSE: SNAP) is going after a similar idea by promoting 3rd-party video content from existing brands and by offering users the ability to follow/subscribe (with the goal of increasing its rev/user - note that video can be a very sticky medium and a great mechanism to introduce short ad content).

Snap's current offerings (including those of investor NBCUniversal) have been well-received and will likely lead to a greater level of live content moving forward. We believe Twitter has the opportunity to get out ahead of Snap (and possibly Facebook), becoming somewhat of an alternative for users looking to cut-the-cable-cord.

If Twitter really does want to be a "platform" when it grows up (a recurring management theme), it needs to start acting like one.

Here's an expanded dive into Twitter's performance and challenges, with Fred McClimans, Samadhi's Head of Research, from Cheddar's Opening Bell at the NYSE (Wed, April 26, 2017):

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Kurt Benson 4 years ago Member's comment

Excellent job highlighting #Twitter's possible potential and shortcomings. I think you've hit the nail on the head regarding the problems the company needs to overcome. But being that they've yet to figure it out, despite having more than enough time to do so, makes me wary of $TWTR.

Fred McClimans 4 years ago Author's comment

Thanks, Kurt. I'm a bit wary as well, but view the Bloomberg deal (and others) as a sign the team is at least gaining a bit of focus in the right direction. If Twitter can conquer the channelization and video aspects, I would expect the user activity gains to follow (assuming bots & trolls are addressed). It is a big change, but at this point, I believe there are not many other viable options left.