Is Twitter's NFL deal a Hail Mary or a solid fix?
- 06 April, 2016 05:53
With Twitter CEO Jack Dorsey under pressure to improve the social network's user base and financial coffers, analysts are split on the company's deal with the National Football League.
Twitter and the NFL announced today that they have signed an exclusive deal in which Twitter will live stream Thursday night NFL football games for the upcoming season. The 10 streamed games will be free and will run across devices.
In a bid to extend the NFL's social media presence, Twitter will also offer pre-game Periscope broadcasts from players and teams, giving fans a more immersive game experience.
Last year, the NFL had a deal with Yahoo to offer free live streaming of regular season games.
It's not clear if Yahoo bid for a deal for the upcoming NFL season, although Bloomberg, citing unnamed sources, reported that Verizon Communications, Amazon and Yahoo tried to get the Thursday night streaming deal.
Bloomberg also reported that Twitter paid approximately $10 million to live stream the 10 games.
"Twitter is where live events unfold and is the right partner for the NFL, as we take the latest step in serving fans around the world live NFL football," said NFL Commissioner Roger Goodell, in a statement. "There is a massive amount of NFL-related conversation happening on Twitter during our games and tapping into that audience, in addition to our viewers on broadcast and cable, will ensure Thursday Night Football is seen on an unprecedented number of platforms this season."
Brian Blau, an analyst with Gartner, Inc., called the deal a great move for Twitter and for Dorsey's push to move the company in a positive revenue direction.
"This is one of the best bits of news for Twitter in the recent past," Blau said. "It's great to see that they can attract partnerships like the NFL. The viewership on the streamed football games will certainly help Twitter reclaim some users who may not be as engaged as they once were."
Twitter, while having gained worldwide mainstream popularity, has struggled to increase its user base, where growth has slowed, as well as its bottom line. The company's user base has taken a slight dip since the second quarter of 2015, when it reached a high of 307 million active monthly users. In the fourth quarter, that number dipped to 305 million. The company also has been trying to stop the drain of key employees.
Dorsey, who took on the role of CEO for the second time in October, is working under the gun to resolve those problems.
"I think the NFL deal for streaming football games will help bring in ad revenue, as they can offer tie-ins to the NFL's brand advertisers," Blau said. "However, it won't fundamentally change the situation. Twitter needs more deals like the one with the NFL, and they need users to come back in droves."
Rob Enderle, an analyst with the Enderle Group, isn't as optimistic about the NFL deal, calling it a "Hail Mary type of move" instead of a permanent fix to the company's problems.
"This looks like management just wanted something big to take the heat off their financial performance," Enderle said. "This feels like a desperation move, not one that is well thought out, but this could be simply because we don't yet know the critical details that could make this work."
Jeff Kagan, an independent industry analyst, said Twitter's deal with the NFL is a positive move for the social network, but it's only a beginning.
"This NFL deal is a great incremental move forward for Twitter," Kagan said. "It's great, but on its own, it's not enough. The pressure is on for Twitter. The question now is, what's next?"