The Battle for Streaming Live Content

 

We’ve all been excited to look at our phone and see a notification bubble on the Facebook app – only to open it and find out that person that you’ve never talked to is “Now live on Facebook.” Social Media companies have been working on perfecting this idea of live streaming and it isn’t so that we can all seamlessly share live content to all our friends. There’s a larger battle brewing in the world of social media & digital business and it has to do with live streaming, sports, and a whole lot of cash.

giphy-4.gif

In 2016 Twitter spent $10 million on the digital rights to 10 NFL Thursday Night Football games that were already available on traditional TV broadcasting networks like NBC, CBS, and NFL Network. There are conflicting reports on just how well Twitter came out after this deal but I’m sure that they when they had made that deal they had hoped it would be a huge money maker and launch them as the first movers in the live sports streaming space. Did it work? No, but they tried and they’ll continue to try.

images.jpg

According to a Broadcasting & Cable interview with a Barclays financial analyst, it’s estimated that Twitter made $50 million in revenue from their NFL deal. If that’s so, Twitter had a nice cash flow as they capitalized on their investment. In January, they came out publicly and said that they were looking forward to continuing their deal with the NFL and expanding their live broadcasts beyond Thursday night football games. Twitter tried to get out ahead and popularize these types of broadcasts; airing more than 800 hours of live-streaming content in the first quarter of 2017 alone. These streams included, but were not limited to, sports, news and other entertainments. Most popularly? The Grammys.

C4fOzWIWIAQcspB.jpg

Twitter’s live stream of The Grammys blew any NFL game that it live streamed out of the water. With 5.1 million people watching, the only event with more popular live stream Twitter numbers was the Presidential Inauguration in January. According to the CFO in February, Twitter planned to continue to amp up their live streams in 2017 by double its current amount as well as expanding its coverage world-wide to sports and other lesser known events.

For a company that is desperately trying to prove to the world that it has a sustainable way to generate revenue, this all seems like a dream come true for Jack Dorsey. And then…the world got another valuable lesson that being the first mover could end up meaning nothing.

giphy-5.gif

Last week, the NFL signed a new contract  to live-stream Thursday Night Football and it wasn’t with Twitter. It was with Amazon and it was for $50 million and it is almost identical to the deal that Twitter signed last year.

Question: How can Twitter compete with a bid like that? Answer: They can’t.

The NFL, and others, are more likely to sign the most lucrative deal that will give them the most exposure and although Twitter’s live-streaming services were successful – they don’t give the NFL the kind of reach that it was hoping for. This fact is one of the reasons that Twitter is going to have a huge time keeping up with companies like Amazon and Facebook who are trying to get this type of content on their platforms. While neither of those two giants had a deal of the Twitter-NFL magnitude until recently, they’re going to completely dominate this market because they want to. The reach and wallet size of companies of this size are unmatchable for Twitter. Amazon plans to make their NFL Thursday Night games exclusive to Prime subscribers only and Facebook continues to grow at a rate that Twitter seemingly cannot keep up with.

giphy-6.gif

For the longest time sports leagues, and other live events, had limited options on how they could go about selling their broadcasting rights. Traditional TV was the main option to make the most money and grow the popularity of the sport. NFL Thursday Night Football games are an extremely small sample size but is it possible that social media could disrupt sport viewing as we know it?

After the NFL deal with Amazon was announced, Fortune published an article “Tech Could Take Over All of the Sports You Watch.” That small sample size of TNF games? According to some, that’s exactly the point – it’s an experiment. The NFL and the sporting world along with tech companies, like Twitter and Amazon and Facebook, have all been investigating the possibility of technology platforms becoming the primary distributors for live content and broadcasting rights. The two things that tech companies have to do? Prove they have a strategy to maximize event revenue and maximize the reach of the content.

nfl-tv-deals1.pngnfl-twitter.jpg

With the NFL traditional broadcasting rights expiring in 2023, technology companies can develop a long term strategy to disrupt one of the most lucrative industries in the television market. Are these tech giants willing and able to do this? Are traditional TV broadcast networks like NBC and CBS willing to evolve into digital spaces to potentially compete with Amazon and Facebook?

I have no clue but I know I’ll be watching more closely to see just how popular live-streamed sporting events start to become on social media.

(Side note: I just imagined not watching The Masters on CBS with Jim Nantz and a little part of me cried.)

giphy-7.gifnantz.jpg

 

 

 

 

 

11 comments

  1. joeking5445 · ·

    It is amazing that Amazon paid 5x the amount of Twitter. I wish we were able to see the exact revenue that Twitter made from the games. I streamed on of the games. As a cord cutter, I love this move. I do not have NFL network, so I miss out on TNF. The deals with Twitter and Amazon increase the total number of viewers and I argue that they are targeting a younger demographic. I think it is a win-win for both the NFL and Amazon.

  2. ghakimeh · ·

    It’s truly incredible to see just how much companies are willing to pay for what it is indisputably the NFL’s worst product: Thursday Night Football. Initially, I assumed it was just companies desperate for any sort of revenue (prior to Twitter streaming last season, it was Yahoo the season before, which did not end up saving it from its eventual sale to Verizon), but with Amazon venturing into this space, I think it’s pretty clear just how serious live streaming is for tech.

  3. isabel_calo1 · ·

    It was such a shock to see NFL move their streaming deal to Amazon after giving it to Twitter originally. I know these is a tough business because each game needs to a attract attention and the more views means more money. However, Twitter could not generate enough views and therefore I think Amazon will definitely will be able yo drag more customers because they are definitely cracking into the entertainment industry. It is sad though to see Twitter fail at an attempt of going into a new market.

  4. Live content is still the biggest obstacle for people who want to cut the cord. There just aren’t that many economically viable ways of streaming all the live sports content you want without doing it illegally. Once there are good options for streaming all major sports that don’t require a cable package, I think traditional cable television is done for. The business model is changing and both the digital platforms and the sports leagues are beginning to understand that.

  5. lenskubal · ·

    I really enjoyed reading this post because it is such a relevant topic. It is incredible to see how companies have battled for streaming online content, and the revenue figures that can be yielded if they succeed. In the future, I think a lot of people will transition away from cable TV and just rely on streaming services. Personally, I have already made this move and refuse to watch cable television. I have an Apple TV and several streaming accounts. The only problem I have run into is viewing sports. During games, I rely on other people, or go out to watch the game. Once there are some options fro streaming sports, I think most will cut the cord entirely.

  6. Ciaran_Cleary · ·

    I don’t have the numbers on it, but one of the reasons why I thought Twitter would be a more natural fit was just because of the eye balls it would get from people clicking on the app or going to the website like they normally do and just checking in on the game. I am not a big Amazon user though, and maybe there will still be that sort of exposure. Also, as more and more people cord cut maybe this is a good way for both the NFL and Amazon to hedge their bets and pick up some market share for the future. I think the streaming of sporting events as a consumer is exciting because its one of the only reasons why I wouldn’t cord cut as of now.

  7. erinfitzpatrick123 · ·

    Really good post – you covered all the different live streams from personal to national sports. I think it’s going to be very interesting to see how live stream effects cable packages and things like that – my dad pays a lot for extra channels to watch his favorite teams, and while he might not yet be able to work a Twitter live stream or Amazon, I think eventually this will change a lot of people’s habits. With live video for personal use, I think there is still a long way to come, as most of the live streams I’ve seen have been silly or accidental. Live video is a powerful tool and I hope it starts to be used to make our lives easier, as it did yours for the masters.

  8. fayehubregsen · ·

    This sports streaming battle that is a’brewing has revealed various forerunners in mobile live-streaming including, not surprisingly, the NCAA during March Madness. Despite the fact that it was through their in-house platform, it revealed enormous market demand. The Thursday Night Football partnership with Amazon is a big fish on so many levels including (as you mentioned) revenue generation, but even more so the value-add for the soon-to-be graduates who will soon be paying dues at their desks on Thursday nights. Twitter may not have been able to win out the NFL content partnership, but that’s not to say there couldn’t be a huge opportunity for live-streaming Boston College intramural flag football. Just a thought. Ultimately, it would be truly devastating to imagine the Masters without Nantz, but I’m hopeful the future of broadcast streaming will make room for him should that decision arise!

  9. talkingtroy · ·

    Interesting post but I’m not sure we’ll see everything move to streaming through Amazon (or it’s competitors). Comcast (as well as most of the rest of the major tv providers) have already begun to offer streaming content which is in my opinion the primary benefit of twitter or Amazon. Cable companies can provide the same easy access and when it comes to comcast this also often includes exclusive content (I know a lot of the games I want to watch are on comcast sports net). If they can do that, the only other advantage I see for Amazon is cost savings but I think cable costs will continue to go down while companies like comcast still own the majority of internet connections so as far as I see it I am still at their mercy.

  10. Nice post. This move is particularly threatening to traditional networks, as sports are some of the only programming that they can still get premium advertising dollars for since people are more inclined to watch it live.

  11. mikeward7 · ·

    As an avid sports fan I cant wait for sports streaming on social media to be a regular thing. There’s a lot of times where I have to miss big games or cant watch my home team play because its not on television in the boston market. This will spread the games so much more and make a lot of money for both sides. I really think this is going to get a lot bigger in the next several years.

%d bloggers like this: