Photo Credit: pexels
Twitter is no longer just a social networking site with a few extra video features. It’s becoming increasingly clear that Twitter has in mind a total transformation of its business model in which it is much more of a live streaming video site with a few social networking features. The latest move that analysts are buzzing about is Twitter’s release of an upcoming slate of new live streaming programs, including two 24/7 live channels and several daily news shows.
Twitter’s changing business model
In many ways, the embrace of live streaming as a business strategy makes a lot of sense. It’s now clear that Twitter has no chance of ever catching Facebook to become the most popular social networking site. And Twitter is even losing ground to social networking competitors like Instagram and Snapchat, both of which have used video to power their rise to popularity.
At the same time, Twitter has always held allure for celebrities and those in the entertainment world, who have always viewed it as a way to aggregate audience, build up a huge fan base and find a way to broadcast breaking news to these fans without the hassle of going to a media middleman. Even the current President of the United States, Donald Trump, has embraced this model, viewing it as a way to get the word out about political events without relying on the media.
The link between video and ad revenue
And there’s one more reason why this “second chance” for Twitter makes sense: that’s where the money is. In other words, people just weren’t buying enough ads on Twitter to ever make it financially self-sustaining. However – and here’s the important part – people are willing to buy ads for live video.
In fact, in announcing its upcoming lineup of shows, Twitter specifically pointed out that “video has become the single largest revenue-generating ad format.” For now, there will be two ways to buy ads on these Twitter video programs – pre-rolls (the annoying ads you’re forced to watch before a video plays) and mid-rolls (the even more annoying ads that appear out of seemingly nowhere during a long video).
And that mindset – create shows that can maximize ad dollars – has led to the creation of a particular slate of shows. There will be live programming from Bloomberg, BuzzFeed, Live Nation and Vox Media. And there will be two different 24/7 channels – a round-the-clock news channel from Bloomberg and a 24/7 news channel on sports called “Stadium.”
But will this strategy actually work?
Somewhat discouragingly, the Thursday Night Football experiment from Twitter last year turned out to be a failure. The company paid $10 million for the rights to live stream some NFL games, but this year, the NFL decided to go with Amazon as a partner instead. So how much success will the new sports shows from Twitter actually enjoy? This content has to develop its own audience, and not just be a lot of “B-roll” video that MLB and the NFL have created and can’t use elsewhere (e.g. interviews with players that didn’t air on ESPN).
There’s clearly a lot of work ahead for Twitter. The company has created an interesting mix of live streaming partnerships that includes both mainstream media (Bloomberg) and digital media (BuzzFeed, Vox Media) partners. Clearly, the executives at Twitter HQ are hoping that, by casting a wide enough net, they will be able to walk away with a huge catch.