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Can Periscope Become The Pillar of Twitter's Growth?

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This article is more than 7 years old.

Recently, Twitter‘s live broadcasting platform “Periscope” reached its first anniversary, a year in which it witnessed strong growth in activity. Over 200 million broadcasts were created on the platform in the past twelve months and 110 years worth of live video are currently watched on the platform every day. Periscope had attracted 10 million users in the first four months after its launch and has seen a significant increase in time watched from 40 years of video in August 2015 to 110 years in March 2016 (as noted). This indicates a greater level of engagement by users on the platform. We believe that, as live streaming becomes increasingly popular, Periscope could be the key driver of Twitter’s revenues in future.

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Steady Increase In “Time Watched” Indicates Engaged Users

Twitter defines the “Time Watched” metric as the aggregate amount of time people spend watching live broadcasts on its Periscope platform on iOS and Android devices. Increases in time watched indicates that broadcasters are able to engage audiences for longer periods of time and that viewers are finding high quality broadcasts in their feeds for viewing. This is an important metric to measure the success of Periscope, as it also acts as a proxy to measure active user growth. A nearly 200% increase in time watched from 40 years to 110 years in a period of seven months indicates the growing popularity of the platform.

We believe once Twitter develops a monetization strategy for this platform, Periscope could become a key revenue driver for the company. Advertisers are now increasing the focus on live streaming and digital video advertising. According to a January 2016 research report by eMarketer, nearly 80% of U.S. retail executives stated that producing live streaming video events helps them create more authentic interaction with audiences. A survey from Cowen and Company published in Q1 2016 estimates that U.S. digital video ad spending will reach $28.1 billion in 2020, up from $9.9 billion in 2016.

However, competition in this space is intensifying. Facebook recently opened up its “Facebook Live” platform for all iOS and Android users in the U.S. Reports suggest that Google is developing its own live streaming app called “YouTube Connect”. To ensure that it stays ahead of competition, Twitter is investing heavily on Periscope. It became one of the first apps to debut on Apple TV and is thus viewable on the web apart from iOS and Android devices. New features such as the ability to broadcast from a GoPro camera and watch any broadcast live from a Tweet were added to the platform recently. Pairing Periscope with Twitter provides a greater distribution network to a broadcaster and enables the company to link Periscope to its revenue products. Twitter believes that live streaming video is a strong complement to the live nature of Twitter and plans to continue investing heavily on this platform.

While Twitter is struggling to grow its active users, the initial success of Periscope indicates that live streaming could present a huge growth opportunity to the company. Brand advertisers have already taken notice of the platform and are using it for digital marketing. General Electric used live Periscope footage shot from drones to show its vast fields of clean energy wind turbines from the air. The company created a whole campaign from these drone videos and promoted it on the media. We believe that, as Twitter tries to revive itself, Periscope could be one of its key revenue drivers, with the right monetization strategy.

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