Twitter Inc. TWTR fell nearly 4% yesterday as many analysts said that viewership for Thursday's NFL game, live streamed on the network, was “disappointing”.
Twitter live streamed the first NFL match between New York Jets versus Buffalo Bills that had an average viewership of 243K. Viewership peaked at over 2.1 million for three seconds on Twitter. Moreover, average users spent 22 minutes on the platform. In contrast the CBS and NFL network had a combined average viewership of 15.4 million. Also, the TV broadcast had an audience of 16.4 million at the peak.
Twitter definitely lagged way behind as far as the numbers are concerned. Further, per media reports, Twitter is expected to generate $2 to $4 million in revenues from the Jets/Bills games, which is of course unlikely to “move the needle” for Twitter.
However, we believe that the Jets/Bills games viewership has a little more significance. “Live streaming” especially sports is a lucrative opportunity. Though NFL is a onetime deal with only 10 games, it marks Twitter’s foray into sports live streaming. Through the deal, the company aims to bring in more users, especially millennials. At the same time, it also intends to help marketers reach the younger demographic through its Amplify program. The company has collaborated with the likes of Anheuser-Busch InBev, Nestlé, Sony Pictures, and Verizon for ad packages for NFL games.
If Twitter manages to gain decent viewership for the remainder of the games, anlaysts observe that it is likely that NFL and Twitter will join forces again in the future. Anlayts further add that the increase in viewership will also bode well for other extremely popular NHL, NBA and MLB games that Twitter will be live streaming in the near future. These deals are Twitter’s way of attracting more users and advertisers to its platform. Twitter just has 313 million users whereas the world’s largest social media service Facebook Inc. FB boasts 1.7 billion users. Even the photo sharing app, Instagram has half a billion users.
Twitter is making some changes to its platform to make it more user friendly. Recently, the company announced that has it has now changed the way it counts 140 characters by doing away with calculating media attachments and @names in the count, enabling users to express more in tweets.
We have to add that focusing on “live” and changes to its platform, though heading the right direction, haven’t had a favorable impact on its financial performance yet. This isn’t a good sign because investors are losing patience. Twitter has been in trouble for long now. Shares have tanked over 34% in the past one year and are trading way below its IPO price of $25.94.
In fact, Twitter’s elusive turnaround has many questioning the standalone status of the company. Buyout rumors have been plenty this year. Under such circumstances, we believe that Twitter has to make its live streaming deals work or else it might have to put up a sale signboard soon as is widely expected.
At present, Twitter is a Zacks Ran k#3 Hold) stock. Better-ranked stocks in the tech space include NetEase Inc NTES and NetApp, Inc. NTAP. Both sport a Zacks Rank#1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
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