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Twitter Is Suddenly Monetizing Periscope

By Adam Levy – Jan 19, 2016 at 7:14AM

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Periscope streams are now playing inside Twitter, opening the door for advertisers.

Image source: @Periscope on Medium.

Fresh off being named App of the Year by the App Store, Periscope no longer requires you to download its app. Anyone that uses Twitter (TWTR -0.14%) will be able to view Periscope live streams and replays directly from their timeline -- no app needed. Viewers get the Periscope experience -- comments, likes, etc -- without having to download another app. This follows Facebook's (META -2.88%) plan to roll out live streaming in its users' News Feeds.

While Periscope already had a presence on Twitter, integrating the video stream into timelines increases the reach of the live-streaming product. And with Twitter's ad-targeting tools, Periscope and Twitter may have inadvertently started monetizing Periscope streams.

How to monetize a secondary app
To be sure, this is a strategy Twitter has already taken. The company integrated Vine videos with its flagship product as soon as it launched the six-second video app. Twitter suddenly had a lot more video content that businesses could place display advertisements around.

Facebook did a similar thing with Instagram. Instagram had already been able to share its content on other platforms including Twitter. After Facebook bought the company, it forced Twitter users to click through a link to get to Instagram's website or app while Facebook users could simply see the photo in their News Feeds. That accomplished two things: it brought new users to Instagram and it monetized the content through Facebook.

Now Periscope is getting a similar treatment. Integrating with Twitter and its 320 million users should expand viewership for Periscope's broadcasters. At the same time, businesses interested in advertising to certain Periscoper's audiences can target people that visit or follow their profile on Twitter. With Twitter's recent rollout of logged-out visitor advertising, businesses have access to a potential audience that's significantly larger than Periscope's existing user base.

But why make the switch now?
Periscope's previous presence on Twitter involved a screenshot and a link to Periscope's app. This is not unlike how Instagram shares photos on Twitter, driving traffic to Instagram instead of letting the rival social network capitalize on its content. Since Periscope is still in its infancy -- relatively speaking -- it would make sense for Twitter to continue driving as much traffic as possible to Periscope.

But there's a threat coming Periscope's way: Facebook is rolling out its own live video-streaming feature to all users.

Facebook started offering live streaming to celebrities this summer; it followed up with journalists a couple months later. Last month, select iPhone users in the U.S. started seeing the option to live-stream to their friends.

It doesn't take a newshound to know that Facebook has more users than Periscope. With 1.5 billion monthly active users, Facebook has more users than anything ... ever. That means its move into real-time video broadcasting is a serious threat to Twitter's start-up as well as Twitter's efforts with video on its flagship product.

Periscope's integration with Twitter should expand its audience and put Twitter in the best possible position to combat Facebook's efforts in live streaming. Still, with Facebook's audience about 5 times larger than Twitter's, Periscope needs to grow quickly to ensure it's not usurped by the social media goliath.

Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. 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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