Last Friday, shares of Twitter (NYSE:TWTR) jumped after the company's first live stream of an NFL game, to which there were many positive articles written on this site. While reactions to the broadcast were mostly solid, it is still way too early to determine if the NFL deal will pay off. In fact, the company's first true test will be this week and investors need to realize which games Twitter actually has rights to.
As pointed out on this site on Monday, shares of the social media name lost a chunk of gains after total viewership data was released, detailed below:
Twitter registered an average of 243,000 viewers per minute and 2.1M total unique viewers worldwide of the stream. CBS and the NFL Network, meanwhile, counted 15.4M average viewers per minute and total viewership of 48.1M.
With Twitter having over 300 million active users, the total viewership represented less than 1% of the company's base. You probably can figure some of those viewers already had Twitter accounts, so I wouldn't expect many new additions to the user base. Plus, as the numbers suggest, traditional TV viewership was several times that of the live stream.
I'm more curious to see what happens this week, not just to compare week-to-week numbers, but because this Thursday is an important one for network TV. This week is the biggest week in terms of TV show premieres for the four big networks as well as certain cable shows. This Thursday, shows like The Blacklist and Grey's Anatomy return so the NFL game will be going up against a number of popular shows. Will that hurt the number of eyeballs Twitter has, or will people have their shows on the TV while the football game will be on a tablet or other device? That's a key question.
Another key issue for Twitter is which games the company has available in its broadcast package, and you can see the full Thursday night list here. If you notice, all of the Twitter games will be on one of the big networks, either CBS or NBC. Twitter does not have access to any of the games that are only on the NFL Network, which would be the better opportunity for the company. According to data from last year, NFL Network was only available to about 60% of cable users. As a result, the numbers shown above for last week could be representative of Twitter's weekly success, where Twitter has just a small fraction of what's seen on TV.
So let's not jump to any conclusions with Twitter just yet regarding its NFL success. This week, the big four networks return with their shows, which likely will reduce football viewership on Thursday nights moving forward. Twitter only has access to certain games, unfortunately those that are on the big four, which limits the potential of this deal. Also, just because people watch the games on Twitter doesn't mean they will become Twitter users for the long-term, which is what most investors are using to determine the company's success.
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