The Significance Of Twitter's (TWTR) Push To Live Streaming

On Thursday, July 28, Twitter’s (NYSE:TWTR) latest of multiple live streaming deals was announced; this time it’s coverage of ELEAGUE’s Season One Semifinals and Championship matches.

ELEAGUE is an eSports (professional gaming) organization formed from a partnership between Turner Broadcasting and IME/IMG, an American talent agency that also recently purchased UFC (Ultimate Fighting Championship) for $4 billion.

The upcoming competition, which will stream on Friday, July 29, and Saturday, July 30, features Valve’s popular Counter-Strike: Global Offensive video game, which has averaged over 350,000 concurrent players a day over the last month.

In response to the announcement, Twitter CFO Anthony Noto stated that “Esports fans go to Twitter to see and talk about what is happening now in competitive gaming.” He continued by stating that Twitter is thrilled to provide both the live content and commentary that eSports fans are looking for, “all on one screen.”

Why Is Twitter Pushing So Hard Into This Market?

On Tuesday, July 26, Twitter announced its Q2 2016 earnings report. Although the company beat earnings expectations, it only saw a 3% year-over-year increase in monthly active users (MAUs). For a social media service, such stagnant growth leaves much to be desired.

In their shareholder letter, Twitter mentioned its five priorities for the year are as follows: refining their core service, live-streaming video, creators and influencers, safety, and developers. Twitter recently streamed both the Republican and Democratic National Conventions. It also inked deals to stream games for the NBA (basketball), NFL (football), NHL (hockey), and MLB (baseball) leagues, amongst other partnerships.

In live-streaming, Twitter sees its next big thing. The service is already meant for live events and commentary, so it’s an initiative that does makes some sense. Facebook (NASDAQ:FB) has also invested millions of dollars into deals with various media outlets and celebrities to expand its own live-streaming service, meaning there is already competition in its space.

Twitter hopes that these streams can draw more traffic onto its service from both users and non-users, and in the process help alleviate its continued lack of growth.

Bottom Line

Twitter continued in its shareholder letter by stating that “Though these experiences are still in early testing, we’ve received great feedback and are making rapid improvements as we move closer to a final product in the fall.”

There’s no telling if and how their live-streaming initiative will pay off, but either way Twitter needs to do whatever it can to find a new growth catalyst soon.

Twitter currently sits at a Zacks Rank #3 (Hold).