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Twitter ( TWTR ) made an end run around Facebook ( FB ), Amazon.com ( AMZN ), Alphabet ( GOOGL ) subsidiary Google, Verizon Communications ( VZ ) and Yahoo ( YHOO ) to capture digital rights to the NFL’s Thursday Night Football, a deal Twitter announced early Tuesday. Now the real work begins, says Monness, Crespi, Hardt & Co. analyst James Cakmak. While “winning the deal is one thing, executing to optimize the product experience is another,” Cakmak wrote in an industry note. The NFL has streamed selected games in the past, but this is its first season-long streaming deal. It’s also a high-profile foray into live programming for Twitter. Given Twitter’s focus around live events and Twitter CFO Anthony Noto’s prior position as the NFL’s CFO, “We see this as an opportunity to leverage the Periscope acquisition and achieve success around live programming and promotion of the conversation around it,” Cakmak wrote. He added that “the $10 million price tag paid by Twitter is less than anticipated, considering Yahoo paid $20 million for a single game last season, which averaged slightly over 2 million viewers per minute. But at this price, we see this as the perfect option for Twitter, with very limited downside.” ‘Bold Moves’ Required By Twitter Stifel analyst Scott Devitt called Twitter’s latest hunt for new users “an aggressive and potentially expensive move by Twitter to reinvigorate user growth and engagement, but bold moves are required to turn the business, so we will wait to fully pass judgment.” The deal poses “no risk” for the NFL, since “it gets its check while continuing to broadcast on network TV and can go back to market in two years, offering streaming rights to the highest bidder, just like it is doing here on the heels of the one-off deal with Yahoo last year,” Devitt said in research note. Last season, Yahoo paid $17 million to stream a game from London and also broadcast on network TV in the teams’ home markets, according to Bloomberg. On U.S. television, NFL commands the highest per-game price for any sport, Bloomberg said. In the most recent broadcast deal, CBS ( CBS ) and Comcast ’s ( CMCSA ) NBC each paid about $45 million a game for five Thursday night contests for the 2016 and 2017 seasons, according to Bloomberg. Under the new deal, Twitter will live-stream the football games to the public for free at the same time they are being shown on NBC, CBS and the NFL Network, the NFL said in a statement. “This is about transforming the fan experience with football. People watch NFL games with Twitter today. Now they’ll be able to watch right on Twitter Thursday nights,” Twitter CEO Jack Dorsey said in the statement. Reports quoted Devitt as saying the digital rights Twitter attained also include the Sunday morning U.K. International Series, which in 2016 will pit the Jacksonville Jaguars vs. Indianapolis Colts in Week 4, the Los Angeles Rams vs. New York Giants in Week 7, and the Cincinnati Bengals vs. Washington Redskins in Week 8. Twitter stock rose last week on reports that MasterCard would be interested in working with social media services Twitter and Facebook to build up their payment services. Twitter stock was down a fraction in midday trading in the stock market today , near 17. Yahoo stock was down 2% midday Tuesday, and Alphabet stock was down almost 1%. Facebook stock was up a fraction. Twitter reported that user growth slowed for the fourth consecutive quarter in Q4 and guided its Q1 revenue below consensus estimates, raising concerns that usage may be peaking and prompting buyout rumors. Average monthly active users rose 9% year over year in Q4 to 320 million. Wall Street had expected 323 million. Growth has cooled from 18% in Q1, to 15% in Q2 and 11% in Q3. For 2016, eMarketer expects Twitter to generate $2.61 billion in worldwide ad revenue, down 11% from eMarketer’s earlier prediction of $2.95 billion. Scalper1 News
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