Why Periscope Could Be a Powerful Driver for Twitter Inc.

Twitter's Periscope service could be a major game changer over the years ahead.

Andrés Cardenal
Andrés Cardenal
May 7, 2015 at 8:47AM
Technology and Telecom

Source: Twitter

The highly anticipated Mayweather-Pacquiao "fight of the century" is now finally behind us. Mayweather won the fight by unanimous decision from the judges, however, many tech industry observers believe that Twitter (NYSE: TWTR) delivered a big knock-out punch during the competition via its live-streaming Periscope service.

Many of the people present at the fight used Periscope to stream the fight to their followers. This generated massive attention from both the media and the general public, and it also raised some concerns regarding piracy. While regulatory hurdles will need to be solved over time, Periscope looks like a disruptive technology with enormous potential in the years ahead.

Welcome to Periscope
Periscope allows you to broadcast live video in real time via your smartphone camera. When a streaming goes live, a notification is instantly sent to your followers, who can join in and comment in real time. There is also an option to make a replay available over the next 24 hours after the broadcast, and you can save the video to your own camera roll for further sharing. Periscope provides a private broadcast option, too; this allows only invited users to watch it.

You don't need to be registered on Twitter to use Periscope, but both platforms are highly integrated. You can automatically tweet a link to the broadcast when it starts, and viewers can choose whether to watch it on Twitter or in the Periscope app.

Periscope has gained a lot of popularity lately. People are using it to broadcast all kinds of things, going from the banal -- the content in users' fridges -- to the far more serious -- footage of the Baltimore riots.

There are no up to date statistics regarding Periscope usage, but Twitter CEO Dick Costolo said during the company's latest earnings conference call that more than 1 million people signed into the app during the first 10 days. In Costolo's own words:

By transporting you into people's lives, you can now jump into the life of a Paris ballet director, you can see what he sees, hear him speak to his dancers and you can communicate with him as a moment in his day unfolds. Then second later, you can be walking the streets of Seoul with a woman who is showing her friends the city. We have seen tremendous early growth on Periscope. In just the first 10 days alone, more than 1 million people signed into the app and even more have tuned in to live broadcast through the web. This is possible because broadcasters on Periscope can share their Periscopes to Twitter to reach a larger audience.

What Periscope means for Twitter
Research firm Jeffries calculates that the U.S. online video ad market could be worth nearly $17 billion by 2017, as TV advertising money continues shifting toward online platforms and video remains one of the most promising ad delivery mediums. Periscope is a key differentiating factor for Twitter in this area, putting the company in a position of strength to capitalize on the massive online video opportunity.

Twitter made only $1.4 billion in revenues during 2014, so Periscope could have a big financial impact on the business if it allows Twitter to capture a considerable share of the online video advertising market over the coming years.

Besides, Periscope could be a powerful tool to attract more users to Twitter and increase engagement. Twitter is already positioned as a top source of real time news, and the social network is especially strong in mobile, as mobile average monthly users -- MAUs -- account for nearly 80% of total MAUs. 

Twitter's mission is "to give everyone the power to create and share ideas and information instantly, without barriers." Periscope fits quite well into that strategy, and it could be major driver for the company over the years ahead, both from a financial and strategic point of view.