Recently, Twitter, arguably the platform that defined the notion of social media, has been on a bit of a stock market tear.
Ever since its stock market IPO, Twitter has been on what might easily be characterized as a death spiral. After surging to an all-time high of just below $70 back in 2014, the share price has languished below $20 for most of 2016-17.
However in recent months, Twitter has once again become a bit of a media darling as it focuses on live streaming, particularly of sports content. The company has signed deals with many of the major professional sports, transforming itself from a text-only platform to one focused firmly on the delivery of rich-content media.
Although Amazon outbid Twitter in a recent deal with the NFL, the company has served notice that it is ready to compete in all media aspects of the sports market. And in the process it is adopting some aspects of traditional broadcast television.
As Cam Gordon, Twitter’s director for Canada, noted in a recent interview, the company will have content such as a regular Friday night baseball game, and live golf every Thursday and Friday morning. In other words, Twitter is fast becoming a live sports delivery platform.
Announcements about these sports broadcast deals, along with an uptick in the key monthly average users metric, has seen Twitter’s share price driven upwards by around 30 per cent over the past year or so. Mind you, in absolute terms, that share price is still far below its all-time high.
From an initial trading price of just over $40 in November 2013, Twitter briefly soared to $69 in early 2014. It’s been mostly downhill ever since, until April last year when it bottomed just above $14. From that point forward the price has mostly increased, especially so in the last quarter, the first to report a profit.
Recently the share price has returned to the doldrums, trading mostly below $30, perhaps reflecting a period of uncertainty with social media in general in the fallout from the Facebook-Cambridge Analytica fiasco.
However, Twitter has many of the key ingredients, such as scalability, robust technology, and a large engaged audience, that it needs to eventually become the equivalent of an ESPN for mobile devices, a 24-hour sports channel. Speaking of ESPN, that staple of American television has realized that standard TV viewing is no longer the draw it once was. So many Americans have cut the proverbial television cord that ESPN has decided to offer its own streaming package in an effort to win back viewers.
Facebook, not wanting to be left out of the sports programming revolution, has recently struck a deal with Major League Baseball to carry one game a week on its platform. Nothing major, mind you, when you consider that MLB teams play more than 160 games a season.
In terms of revenue, the Twitter and Facebook sports coverage deals are minuscule compared to the multi-year TV deals the big leagues sign. At a rumoured $30 million or so for 25 games, the deal pales into insignificance when stacked up against the NFL’s TV deal in the $3 billion range, per year, with multiple networks on board.
That NFL deal was signed in 2011, long before attendance at games began to fall off, and certainly before the concerns of long-term health effects from the sport became a major topic, and certainly well before TV cord-cutting became a phenomenon.
Paradoxically, Twitter became a factor in criticism of an NFL move to limit some TV packages in Canada in favour of a streaming solution called DAZN (da zone). Streaming services are notorious for not being synchronized with the matching TV coverage.
DAZN subscribers reported that their TV streams were running multiple minutes behind the game, making social media interaction, primarily through Twitter, dysfunctional, and certainly making active in-game sports betting impossible.
As this column went to press, and underscoring the importance professional sports team place on Twitter, soccer powerhouse team Real Madrid announced a deal with Samsung to furnish, in the words of the club’s director of marketing, “unique content related to the world of football and offer it to fans from a social platform also unique to be up-to-date on sports news.”
Added Simone Tomassetti, the club’s director of sports partnerships: “Twitter has always been the reference site to comment in real time on sporting events, see and share the reactions with its fans and hear firsthand the protagonists. With agreements like this, users now access relevant content about what is happening in the format they like the most: video.”
Follow me on Facebook (facebook.com/PeterVogelCA) or on Twitter (@PeterVogel).
pvogel@outlook.com
