Today’s announcement that Twitter scored the rights to live stream ten NFL “Thursday Night Football” games this season is big news. It’s even bigger when one considers that the social messaging platform beat out competitors (including Amazon, Facebook and Verizon’s Go90 platform) with a $10 million bid that was $5 million less than the best offer, according to the Wall Street Journal, and half as much as what Yahoo paid for the exclusive rights to a single game last October.
But, according to Peter Csathy, CEO of Manatt Digital Media, the Twitter-NFL pact has a significance that extends well beyond the deal itself.
“It underscores that live streaming is the new battleground of the digital media titans,” Csathy told VideoInk. “It’s certainly important for YouTube, and as Facebook pushes it, too, it becomes ever more significant. Twitter recognizes it must expand its business model, and this is another sign it sees itself as not only a communications platform, but as a media company.”
Not everyone is so impressed. In the opinion of online video pundit Dan Rayburn, EVP of StreamingMedia.com, Twitter’s teaming with the NFL is “not such a big deal.”
“Yahoo got to sell ads with its NFL game live stream in October, whereas here Twitter is just rebroadcasting the CBS or NBC feed with the ads in it,” Rayburn said. “There’s a lot less opportunity for monetization, a lot less opportunity for sponsorships. Twitter obviously paid a lot less to the NFL than it would’ve had to as a result, so Twitter is primarily using it as a way to generate traffic and awareness.”
It’s easy to imagine how a 70-year-old football fan who can’t get to a TV to see the game might be excited to discover that he or she can stream it on their smart phone via this Twitter thing. Fans will also be able to see game highlights on the platform, as well as pregame broadcasts from teams and players on Twitter-owned live streaming app Periscope.
“Twitter is a different kind of platform to spread the NFL gospel,” Csathy said. “The NFL may see Twitter as having unique strength in being a communication platform, as well as a distribution platform, to expand its audience and cultivate a new one.”
But Rayburn doesn’t foresee people signing up to Twitter just to watch a game.
“You’re not going to be watching a three- to four-hour football game on your phone, and you’re certainly not going to be doing it over 3G or 4G because of your data cap,” Rayburn observed. “Also, you’re talking about ten Thursday night games. Let’s say I’m a Jets fan. Out of those ten Thursday night games, the Jets are only playing one of them. It’s not like it helps me watch my favorite team on Twitter, so it’s definitely not replacing any sort of business model or distribution model for sports.”
Rayburn says that deals like this one are loss-leaders feasible only for deep-pocket players such as Twitter, Google and Amazon. But the Wall Street Journal reported that Twitter will be able to sell the time reserved for local commercials, so it’s not completely shut out on the ad sales end. And with the $10 million price tag, Twitter should be able to at least break even, according to Adam Shaw, CEO of Sportle, an online aggregator of streaming sports video.
“For Twitter, it basically the cost of two Super Bowl spots,” said Shaw, a former SVP of distribution and marketing for the NFL Network. “If you apply a typical sports CPM, they would only need to attract 2 million viewers [to be in the black], and that’s on a global basis. So I think they could also make money on this.”