Twitter Inc beat out big tech names for NFL streaming rights but is the investment worth any gains in video driven user engagement strategy
Twitter Inc (NYSE:TWTR) is working to bump up its active user base; no matter the price is the message the company sent with its acquisition of rights to stream the NFL. It is reported that the price for rights to stream 10 games was $10 million and big tech companies such as Facebook, Yahoo, Amazon and Verizon made a play for the rights.
Twitter is clearly banking on a video play to change the engagement level of its 800 million (online and offline) user strong platform. Colin Sebastion from Baird feels that the NFL deal might be a step in the right direction in coverage and reiterated a Neutral rating on Twitter and $18 price target.
Twitter has failed at various strategies to grow its platform with some like the new timeline feature inflaming its loyal user base and others failing to differentiate the social short format network in any way. However, Twitter is a well-established media company and 400 million active users are not insignificant in anyway. A move into native video is therefore a logical step. Yahoo paid $30 million for the rights to stream the Bill vs. Jaguars last year, according to the Baird analyst translating to 480 million minutes of streaming on its platform. While Twitter does not have exclusive rights like Yahoo did, the event will undoubtedly draw a lot of attention to Twitter’s video platform.
Sebastion however feels that while non-exclusive, the streaming rights provide cost effective bargain and an opportunity to re-engage with certain segments of its user base and attractive new users through the hype surrounding NFL. Twitter apparently wasn’t even the highest bidder so the company must have gotten a good deal and considering that Twitter is still posting a healthy profit this is an opportunity well taken to tutheir news centric platform and introduce live broadcasts to it.