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Twitter’s livestreaming effort takes a body blow from Amazon

Twitter got sacked big time when it lost out to Amazon in a livestreaming deal with the National Football League this season.

We learned Tuesday the social network had been outmaneuvered, after the league chose e-commerce goliath Amazon to stream 10 “Thursday Night Football” games this year. The deal was reportedly valued at $50 million — five times more than Twitter paid for the same rights last year.

That was bad news for Twitter, which positioned last year’s agreement as the crown jewel in its livestreaming efforts. Twitter executives have proclaimed the next big thing is live video, leveraging its NFL partnership to rack up more sports streaming deals to attract new users and advertisers, while also keeping skeptical investors at bay.

Competition to livestream events, especially sports, is fierce among tech companies, which are seeking more customers and, of course, dollars. In addition to Amazon, Facebook struck a deal in March to stream 22 Major League Soccer games for its nearly 2 billion monthly users. And Twitter still has streaming deals with Major League Baseball, the National Hockey League and the National Basketball Association for the 319 million people who use the service.

For Twitter, losing the NFL deal is akin to watching your team lose the Super Bowl.

“What we have now amounts to a one-year experiment for the NFL, and it makes you wonder about Twitter’s relevance in this space,” said Paul Verna, a video analyst at eMarketer.

Amazon’s move represents a coming-out moment of sorts and underscores how far sports streaming has come from early efforts, like Twitter’s golf and lacrosse games and Facebook’s surfing contests. Amazon’s only prior connection with football, aside from selling and shipping merchandise, was grabbing the rights to stream the Emmy-nominated NFL Films-produced series “All or Nothing,” which follows the ups and downs of a football team for an entire season.

Analysts say the move is a likely a savvy one for the e-commerce giant.

“We believe Amazon has the potential to be a major disruptor long term,” said Barclays analyst Kannan Venkateshwar.

Twitter declined to comment for this story. Amazon called the deal “a great step” and “a tremendous new value” for members of its Prime service, who will be able to see the games. The games will be simulcast on the NFL Network, as well as CBS, CNET’s parent company, and NBC.

Twitter spiraling out of control

Twitter’s streaming of NFL games was seen as a Hail Mary, garnering attention from sports fans and encouraging people who already use the service to comment on games in real time and tweet more. The streams were well received, and Twitter attracted about 300,000 simultaneous viewers per minute during the 10 games it streamed last season.

Amazon’s big bid made it difficult for Twitter to stay in the game because the social network would have a hard time justifying spending more than the $10 million it did last year for the rights. Barclays estimates Twitter tallied $15 million in profits from last year’s deal.

Twitter declined to comment on those figures but said Wednesday it would continue “to work with [the NFL] to bring great content to our passionate fans.”

Now Twitter’s back where it started last year. Its user growth remains flat despite President Donald Trump turning it into his personal megaphone. The company missed its revenue projections in the fourth quarter of 2016 to boot.

Gartner analyst Brian Blau thinks Twitter’s influence won’t wane significantly because “it is much a part of the news as they are a conduit.”

Still, there’s obviously instability at the company. Even Twitter co-founder and board member Ev Williams is selling some of his stock, which has fallen to all-time lows.

For Amazon, the more you watch, the more you buy

Amazon is unlikely to make money on this deal. Twitter’s profit came on an estimated revenue of $50 million, the same amount Amazon paid for the NFL rights.

So, why do it?

Like with many Amazon strategies, the purchase is a long-term play and one targeted at building up Amazon’s ecosystem of devices, videos, services and everything else.

Ultimately, the NFL offers Amazon a way to attract more people to its Prime membership rolls and keep existing customers paying, too. On top of that, the company would like to take up as much of your day as it can — whether it’s watching football on TV or reading on a Kindle. The more you’re in Amazon’s world, the more likely you are to buy something from the company.

In that way, Amazon’s NFL deal will work as “functional advertising” for Amazon.com and its main business of selling you bubblegum, said Forrester media analyst James McQuivey.

It’s not all a guaranteed success, though. Amazon Prime Video doesn’t have much experience with live TV, for example.

And Twitter is unlikely to sit still. The company said last week it has collaborated on more than 40 livestream partnerships. So far this year, Twitter has aired more than 800 hours of livestreaming content ranging from news to politics to entertainment.

It’s an open question as to whether that’s enough to help it survive the likes of Facebook, which says one in five videos shared on its service were live, or anyone else with enough money to grab the NFL and any other sought-after company’s attention.

“Amazon just showed us that everybody is a player in the livestreaming game,” eMarketer’s Verna said.

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