Twitter Inc. Tries to Gain New Users Through Live TV
Will Twitter Inc (NYSE:TWTR) recover lost ground thanks to live events? Some analysts think a new strategy to build user numbers around live events has a chance. Accordingly, Cantor Fitzgerald has issued a “hold”’ rating for Twitter stock. (Source: “Twitter (TWTR) Stock Up, Cantor Fitzgerald: NFL Stream is ‘Make or Break’,” TheStreet, September 14, 2016.) Twitter stock has recovered somewhat in the past few days, returning to the $18.00 range.
But sports are just one aspect of Twitter’s new traffic building strategy. Twitter shall also use its platform to provide financial information live broadcasts through a partnership with online TV platform “Cheddar.” This is one cheesy alliance that doesn’t stink for Twitter stock. As the name aptly suggest, it proves the social network’s appetite for live television.
Under the agreement announced Monday, Twitter will daily broadcast Cheddar’s “Opening Bell” and “Closing Bell” programs, evidently at market open and close. Since the beginning of the year, Twitter has focused on multiple initiatives and partnerships to become a genuine provider of live TV services.
NFL Live Broadcast the First Major Test for Twitter’s Strategy
Apart from Cheddar and financial programs, sports and the National Football League (NFL) will be the first major test. Twitter stock could see more gains if the scheduled live broadcast of the NFL game (New York Jets v. Buffalo Bills) is successful. Indeed, Twitter would get 10 additional NFL games as well as other events from major professional leagues, including such high-traffic ones as the National Hockey League (NHL) and the National Basketball Association (NBA). And all this for $10.0 million, which represents a reasonably cheap investment for Twitter. (Source: Ibid.)
Twitter, however, is not the only company to pursue this strategy, as Cantor Fitzgerald points out. Amazon has started to negotiate its way into the sport events broadcasting business. But Twitter has already secured it and, if success follows, it could win over many more users, especially as users do not need a Twitter account to gain access.
That is one of the keys of the strategy to improve revenues. More viewers bring more revenue from the coveted video advertising. Social media or not, revenues still rely on the classic exchange of a good or a service for money or equivalent.
Still, there is a downside. This might be Twitter’s last chance to build user numbers and improve revenues. If this fails, the company will have few options left in this regard. Failure is not the worst thing in the world, though as this would likely give way to TWTR stock going up for sale to the highest—or most interested—bidder.
Evan Williams, a Twitter co-founder, already indicated as much two weeks ago. (Source: “Twitter co-founder says company must consider sale,” New York Post, August 31, 2016.) The takeover rumors intensified in the first days of September, sending Twitter stock soaring.