Tweets and troughs: Twitter and the ups and downs of live sport
IT’S hard to shake the feeling that Twitter is a social network that’s losing ground to its competitors. Facebook has around 1.65 billion monthly users, and is a mobile money-making machine. Facebook’s Instagram app now has 500 million users. Even Snapchat now claims to have more monthly users than Twitter — and they’re the hard-to-reach younger demographic with sunny dispositions and disposable income.
Twitter, though, is struggling to find its mojo. Last week the micro-blogging platform posted its worst quarterly results since the company went public. There was sluggish growth in users, only 3 million newcomers. And while revenues rose 20pc to $602m in the second quarter, there was a net loss of $107m and projections for Q3 revenues are well shy of analysts’ expectations. Twitter is expecting revenues ranging from $590m to $610m.
Naturally, the markets weren’t too impressed that revenues might actually fall and shares fell about 11pc on the back of the announcement.
In a letter to shareholders, Twitter admitted that it was suffering from increased competition from other social networks and the need to diversify its revenue streams beyond social marketing budgets.
But the social network has earmarked some areas to deliver growth. The Twitter Audience Platform, which allows it to sell ads outside Twitter, is now globally live. There’s been a partnership with Google’s DoubleClick Campaign Manager to help advertisers understand the impact of Twitter ads across desktop and mobile. But it’s Twitter’s interest in carving off a slice of the online video advertising pie that’s most interesting. And it’s in the area of sports and sports licensing that Twitter’s plans for reinvention get interesting.
Why sports? Because sport is live, engenders passionate and fanatical following and attracts large marketing budgets.
According to social analytics firm Shareablee, sport accounts for 11pc of all social actions on Facebook, Twitter, Instagram and YouTube — lagging just behind food, fashion/style, nature, and entertainment.
So it’s no surprise that Twitter has been doing deals with a host of sporting bodies. Earlier this summer it trialled a live stream from Wimbledon, where live footage and tweets sat side by side. It has also just announced details of live streaming partnerships with Major League Baseball and the National Hockey League. What’s more, the online sports network 120 Sports will produce an exclusive, nightly multi-sports highlights show called The Rally.
And if US sports don’t float your boat, you’ll be delighted to hear that Twitter has signed a deal with Sky Sports to show highlights and goals for the forthcoming English Premier League season. Twitter users in the UK and Ireland can look forward to real-time clips of goals in their Twitter streams from all games broadcast by Sky.
Twitter’s bet is that the more exclusive sports video content it can accumulate, the more likely advertisers will be to hand over their online video budgets.
It’s a big shift from a few years ago, when social media outlets were battling to become the preferred second screen, allowing viewers comment on what they’re watching on TV.
But social platforms no longer want to be a second screen, but to be the first one too. And Twitter isn’t the only one earmarking sports as a point of attack.
YouTube secured free-to-air broadcast rights to the Spanish football league’s preseason competition, and the NFL will soon start uploading classic games to its YouTube channel. Facebook has indicated that it’s interested in buying the rights to Thursday night American football games in the US. Amazon has created a reality TV show around the Arizona Cardinals’s 2015 season. And aside from the social networks, there’s also the rise of quadplay competition, like Virgin Media and BT.
The cannier broadcasters are aware of the encroaching threat, although they may be loathe to admit it. On an earnings call last August, Disney’s chief executive Bob Iger acknowledged that ESPN was losing subscribers. He has subsequently said that ESPN needs to be included in “skinny bundles” — smaller packages of cable channels — and to find new platforms.
One of these platforms may well be Twitter. After all, the live streaming Wimbledon trial was done in partnership with ESPN. The question for Twitter is whether it has the time to evolve into a de facto broadcasting channel, if it continues to underperform in the market.