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Surprise: Twitter's Sports Plan Is Brilliant
Twitter's Plan for the Future Makes Sense
Date Published: 2016-08-29Author: Ophir Gottlieb
Preface
In 2016 Twitter has staked a claim to streaming video rights for sports franchises, and it turns out, that plan makes a lot of sense, and maybe, just maybe, it's brilliant.
STORY
In just 2016, Twitter has secured partnerships with the NFL, NBA, MLB and NHL -- making it a clean sweep for all of the major sports franchise in the United States. But, the company has gone further into sports to secure deals with Major League Soccer (MLS), Wimbledon, the English Premier League and several of the top collegiate sports conferences. While there have been other streaming deals, it's hard not to note the theme: sports -- a lot of sports.
A PLAN THAT MAKES SENSE
In a quick word association game, if you're an investor and I say the phrase "Twitter Stock Price", I'm guessing the next words out of your mouth likely won't be kind. But it turns out that the Twitter sports plan has both rhyme and reason.
In an article written by Darren Heitner via Forbes, we are given access to the numbers that surround the world of sports media -- and they're big.
SPORTS
The article opens perfectly:
"
The sports market in North America was worth $60.5 billion in 2014. It is expected to reach $73.5 billion by 2019.
The sports market in North America was worth $60.5 billion in 2014. It is expected to reach $73.5 billion by 2019.
"
But the sports industry revenue measurements span various aspects, including ticket sales. Twitter is after the media business, and "Sports media rights are projected to go from $14.6 billion in 2014 to $20.6 billion by 2019, accounting for a compound annual rate increase of 7.2%."
But the trend goes further. Television advertising revenue is hitting a wall for a bevy of reasons, not the least of which is cord-cuttter and budgets moving to social media. But, the little known secret here is that live events, like sports, are keeping the TV ad world going. Here is a great snippet from Ad Age:
"
According to Kantar Media estimates, sports programming in 2014-15 generated $8.47 billion in sales for ABC, CBS, NBC and Fox, accounting for more than one-third (37%) of the Big Four's overall ad revenue for the period. That marks a 35% increase from five years ago,
According to Kantar Media estimates, sports programming in 2014-15 generated $8.47 billion in sales for ABC, CBS, NBC and Fox, accounting for more than one-third (37%) of the Big Four's overall ad revenue for the period. That marks a 35% increase from five years ago,
"
No matter how much we DVR or watch streaming video on demand, sports is one of the few mega entertainments that is generally watched in real-time. Now, Twitter has lost a lot of ground to Facebook and Google in all things adverting, but the company does still stake a claim to being a legitimate player in the real-time communiques game.
NFL
Even diving more myopically into Twitter's sports deals, we know the focus is the NFL, where the social media company has secured exclusive streaming rights outside of NFL owned properties. To give you a sense of how absurdly successful the NFL is, try this fact from Ad Age:
That is absurd.
PUTTING IT TOGETHER
Taking Twitter's real-time strength and attaching it to streaming sports, in particular the NFL, is less 'hope and a prayer', and more of a carefully planned and shrewd attack. Whether Twitter can turn its oft times criticized confusing platform into one where people land and just stream video will be seen, but the NFL and the other sports deals, friends, that was not a hope, that was a plan.
The author is long shares of Twitter .
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