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Is Live-Streaming Twitter's Ticket to Growth?

By Andrew Tonner – Jul 17, 2016 at 3:03PM

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As rivals Facebook and Snapchat continue to expand their video offerings, Twitter's latest live-streaming deal could help finally reignite the platform's long-dormant user growth.

Image source: Twitter. Copyright Marisa Allegra Williams (@marisa) for Twitter, Inc.

Is Twitter (TWTR) the future of TV?

As the struggling tech company gropes for a toehold outside of its core microblogging product, live-streaming TV has emerged as a surprising area of opportunity for the company, though rivals like Facebook (META -6.79%) covet the market as well.

Unlike Facebook, Twitter has managed to secure the rights to broadcast some relatively high-profile live events, including a recent deal with media giant Bloomberg. In this article, I'll briefly review this news and what it means for Twitter's ongoing product development efforts.

Twitter and Bloomberg strike a deal

According to reporting from multiple news outlets, Twitter and Bloomberg recently reached an agreement that will grant Twitter the rights to stream three Bloomberg programs over its social network. The shows in question are tech-focused Bloomberg West, business recap What'd You Miss?, and political talk show With All Due Respect.

Those familiar with the specifics indicated to other outlets that the deal largely mirrors Twitter's NFL streaming deal, which allows Twitter to live-stream 10 Thursday Night Football games next season over its platform. Like its previous NFL deal, Twitter will reportedly share advertising revenue with its partners using a 70%/30% model.  

The Bloomberg deal serves as the latest example of Twitter's aggressive push into live-broadcast content. Earlier last  week, Twitter announced a deal with CBS to stream the upcoming Republican and Democrat national conventions over the service. This follows reports of Twitter pursuing similar live-streaming deals with the National Basketball Association, Major League Soccer, and Turner Broadcasting. 

Twitter clearly views airing more live content across its service as a key strategic priority. As for the investing implications of its endeavors, the likely outcome remains far less certain.

Some progress is better than no progress

Twitter has lost ground to nearly every competitor -- particularly Facebook, its Instagram subsidiary, and vanishing-video pioneer Snapchat -- in the battle for new users and advertising dollars. With its product development efforts having stagnated in recent years, Twitter's mainstream value proposition clearly leaves something to be desired. What is more, simply adding copycat features seems unlikely to attract new users into the Twitter-sphere. The company appeared to be mostly treading water -- until its push into live video, that is. 

Former Twitter CEO and Silicon Valley cameo actor extraordinaire Dick Costolo once described an idyllic vision for Twitter as a "digital town square." Up until this push into live content, Twitter users accessed the service to comment and see what others were saying about whatever happened to be in the news at any given moment in time.

Now, by bringing the content onto its own platform, Twitter can act as a value-enhancing layer on top of those broadcasts, where the discussion accompanying a live event makes the experience all the more entertaining. That's the kind of value proposition that brings users of all kinds onto a service, though an untested one at that.

Twitter's decision to plow headlong into live content also coincides with similar efforts at competitors like Facebook and Snapchat. Facebook's recently launched Live feature has been arguably the social network's top priority this year, while Snapchat's core product places videos and images at its very epicenter. Video, particularly of the live kind, is clearly the future of sharing online, and it appears Twitter may have finally discovered its place within this industrywide push.

This is the first time in a long time I've closed an article on Twitter on a positive note. It is by no means clear what kind of traction Twitter can gain from its foray into live events and content, but this is the first time in recent memory when it seemed like the company had a product strategy both scalable and plausible. Could this be the start of something bigger? 

Andrew Tonner has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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