For quite a while, the balance of the news out of Twitter (TWTR) has been discouraging, but in this MarketFoolery podcast segment, host Chris Hill, Million Dollar Portfolio's Jason Moser, and Stock Advisor Canada's Taylor Muckerman discuss a more hopeful sign. The company has been talking up its plans to live-stream 16 original shows on its platform, and on Monday, it revealed that it had found advertisers that were ready to back its play. Will this be a profitable new revenue stream for a company that has had trouble monetizing its users? Will it move the needle far enough, or fast enough?
A full transcript follows the video.
This video was recorded on Sept. 25, 2017.
Chris Hill: Back in May, Twitter previewed for advertisers 16 different live video shows that it was planning to stream this year, including shows from producers like Live Nation, BuzzFeed, Major League Baseball. This morning, Recode reporting that the advertisers are buying, and in fact, Twitter has secured ad commitments for all 16 shows. So, if nothing else, this is an encouraging sign. Jason, we don't know exactly the amount of money involved here. But presumably, Twitter has structured this in such a way that the advertising supports the shows in a profitable way.
Jason Moser: Well, glimmer of hope. Those are your words, not mine. Let's be very clear here. No, all kidding aside, I guess, yeah, glimmer of hope. I was fascinated to see this was actually the case, because normally, it's one thing for them to present this strategy and this plan and the things that they would like to do, but that's sort of expectations, and then reality sets in and then you can only do what you can really fund. But, to see that they were able to actually fund all this stuff, it's certainly encouraging for them. I certainly have been very critical of their discovery efforts when it comes to the live. If you're going to center your business around a strategy of live video, then it would make sense that you want to make sure your users can actually find said video. And Twitter has made it very difficult, I think, for anyone to find much of the live video that's going on on that platform. Now, with that said, it's a quality experience. The video is of good quality. And I do think it's an interesting way to bring the second screen together with the first screen on one screen. I mean, I like the stuff that they're doing, and I think the content they're looking to produce is compelling, and it's because it doesn't focus on one big audience. It focuses on a big cross-section of audiences. So, rather than finding that one thing that everybody wants to watch, there's a lot of different things that smaller audiences are going to want to watch. So it's a little bit of something for a lot of folks out there. And I like that. I think that's good. I think this is going to give them an opportunity to try to monetize a little bit more on the advertising front, because I think that for their product, for that platform, I think video is really the only hope. It's difficult to monetize, advertise, when you're scrolling through that Twitter feed so fast. Whereas, if someone's watching a video, and you can capture those eyeballs either pre-roll, midroll, or post-roll, then that's good. So, it's a good thing. I think the burden of proof is obviously still on them to show that the demand is out there. But the fact that they were able to fund all of these shows does imply that perhaps the demand is there in some capacity.
Taylor Muckerman: One partner I'm interested to see how it works out with is Live Nation. You see sports, everybody wants sports, everybody wants news, but here you might even get some live concerts on Twitter, which I think is a pretty interesting aspect of --
Moser: And they've taken that step. I thought it was really neat to see, a few months ago they did the Zac Brown Band opener in Atlanta, streamed the whole thing live. We watched it on a big screen at home. That's a really neat experience.
Muckerman: For sure.
Moser: I think the more that they can do things like that, the better off they're going to be. They just still seem to be moving very slowly. You have to pick the pace up a little bit. It's still hard to get a full read on what management is actually doing. But, all things considered, I'll still hang on to my shares. It's a big network. It's become more relevant today than ever before. So, it still matters.
Hill: Back in May when they unveiled this, they essentially had their own mini upfront for advertisers. I assumed it was going to be somewhat akin to what we've seen Amazon do with its original programming, where Amazon from time to time has put out a bunch of shows where they've said, "Here's a bunch of first episodes, and we're going to see what people vote for, we're going to see what people actually watch, and we're going to make our decision to back shows based on viewers' appetites." So, I just assumed, here's 16 shows, there's going to be greater interest in some than others. They're not going to run all 16 of these things. And in fact, to your opening point, Jason, the appetite's there.
Moser: And the thing is, when you look at the actual content that they're slinging out there, it definitely fires on their strengths. It's focused on sports, on news, on entertainment. It's NBA, it's baseball, it's an NFL talk show, it's news with, whether it's Cheddar or Bloomberg, it's entertainment with Live Nation, Viacom. I mean, they do have data. And they understand what their users like, and they understand the age demographics of who's doing what. And so, certainly they're catering that lineup around that. It's just a matter of really proving that it has staying power. This is definitely a positive step. But there's still plenty left to do.
