Why I’m Buying Twitter Stock…
Everyone is trying to figure out these days what to make of Twitter. Will it rebound and maintain its position in the social/mobile ranks of Facebook, Snapchat, and Instagram? Or is it the next MySpace?
I should start by saying that I’m never been much of a Twitter user from a posting/creation standpoint, only from a consumption perspective. And I think thats ok, for me and for Twitter.
Lets start by looking at the strengths of Twitter today:
- Users: 310M MAU according to their last earnings report, and 140M DAUs
While not growing at the rate Wall Street would like, and opportunity for engagement growth, by no means a small, insignificant number
2) Monetization: A real strength of Twitter’s. Their Q4 ’15 ARPU of $6.31 is certainly no Facebook ($13.54 for Q4) or Google ($40+) but its strong nonetheless.
Twitter has built an excellent ad sales team, have done a much better job over recent years with ad product than consumer product, and has made some strong acquisitions such as MoPub and TapCommerce.
3) Data, Data, Data: From their in-house builds to really smart acquisitions like Crashlytics, Twitter is sitting on a treasure trove of advanced data & tools with Twitter Analytics.
4) Twitter is a diversified business: Twitter is more than just an identity-starved user product. Fabric is a pretty incredible suite of tools for app developers. Facebook has made a killing around their ‘Build-Grow-Monetize’ developer ecosystem. Twitter today might be a bit more ‘Analyze-Monetize’, which is not quite the same, but potential for more here.
5) Mobile News: for all the flak Twitter gets, its STILL the place where public figures and media outlets in particular turn to share, react, and express themselves in real time. As do their fans. During Beyonce’s epic VMA performance last night, there were nearly a million tweets in just a few minutes.
Those are some impressive strengths. It would frankly be a shame if Twitter does not rebound given the above.
So, what should Twitter do on the consumer side?
I firmly believe Twitter can own Premium Live Broadcasting on Mobile
A) Moving everyday tweeting from everyday people to a backseat experience and bring events to the frontline of the app.
I know that many of the 140M DAUs still use Twitter to tweet and share random stuff about their day. But this was much more compelling as a feature 4–5 years ago when this sort of micro-blogging presenting a simpler way to share your daily life than your Facebook feed.
But Snapchat has since arrived and made this experience visual and much more compelling. And they’ve reach a critical mass that proves they are here to stay. Moreoever, even Instagram is now in this space with their Stories product. Twitter has no need to be in the ‘individual, peer to peer storytelling’ space and doesn’t need to kill this feature, but should put it in the back seat.
B) Go get live, mobile rights to major event programming. Oh wait, they are already doing this — see NFL deal — which tells me that they are likely thinking along these lines and well ahead of my stupid Medium post.
Point being — nobody truly owns event programming on mobile, and Twitter already owns all of the real time social chatter around these events.
Yes, Snapchat has Live Stories. But guess what, as someone who used to work there, I can tell you that they are so secondary to the main consumer experience on Snap — creating and consuming peer to peer stories- that it barely puts a dent in the overall business. Snapchat owns self-expression, there is no stopping that machine, which is why Twitter should get out of its way. But if there is one thing I’m learning from mobile — its that its very hard to own multiple behaviors in a single app (i.e., the risk of Instagram’s push into user stories) — and unless Snapchat is prepared to separate out Live Stories / Premium Media from the core product, which its not anytime soon, Twitter can own this.
As for Facebook, the 1.3B pound Gorilla in the room, not happening. Facebook’s core app is about your digital identity, major life events, and sure, a news feed full of everything. I think Facebook would have a hard time driving consistent critical mass to live events on mobile without a pretty big overhaul of their UX. However, I also would bet that Facebook is going to branch out Facebook Live as a separate app and experience soon, which makes them more likely to be able to compete, but my belief is that this will be focused on the medium to long tail of Live and peer to peer, wiping out folks like Live.ly, Live.Me, Periscope, and YouNow, but not Twitter in this new focus.
I know the pushback — legacy cable and satellite models won’t allow networks to distribute their live events simultaneously on mobile without authentication, etc….and the Twitter-NFL deal only represents Thursday Night, ‘NFL media rights owned games’ for a reason…..
Since when do legacy, archaic models hold us back from improving consumer experience? I think the broadcast is not identical — making the TV broadcast unique from mobile, it can be restricted to mobile, giving TV/carriers web, we are talking a few events a year for a given network out of the thousands of hours or programming the MVPD is paying them a subscription fee for, and heck, that subscription fee is eroding anyhow and will change in 4 to 5 years time IMO.
3) Improve Social + Broadcast UX
Some work to be one on smoothly integrating the conversations around an event with the broadcast itself. And please, for the love of god, figure out a way curate the tweet feed to keep it compelling, but this is super doable and I trust Jack and team to develop a solution here. I mean, if broadcast TV networks — by no means pioneers in product and UX — can figure out how to seamlessly blend in tweets with live broadcast, certainly Twitter can right?
4) Improve Discovery
Duh, right? Discovery is kinda awful on Twitter. Its the primary reason IMO for the flatlining of user growth. Its just so noisey and hard to navigate. For a company with so much data and intelligence on their users and their social graph, they do a pretty shit job of understanding what I want to consume. Guess what — its not simply reflected by who I’m following.
I think a more focused product around consumer and discussing live events, news, and public figures — i.e., stepping back from consuming your friends Tweets and tweeting about your life — will really help in this Discovery need. A simpler, focused product always solves 50% of the discovery battle. Snapchat is a great testament to this.
5) Retain Public Figures
Premium Live Events, News, & Public Figures — that to me is all Twitter should be about. That last piece is still key in my mind. Because Public Figures sounding of really is news in many ways. I do think more and more of these folks are taking to Snapchat, and they should BTW, as a means of showing their personal and creative side to the world. But I think Twitter is still a better platform for them to share their thoughts and opinions about the world. And those public figure thoughts and opinions are a much better springboard for user reactions (tweets) than my mother or friend tweeting about her day.
6) Live News
I’m sorry but Snapchat Discover is not the place CNN, WSJ, and Now This News should be covering live events. Although the latter is not so much about breaking news but rather editorial coverage of ‘news-y’ items, so maybe they make more sense on Discover. Snapchat’s breaking news vehicle the user base itself and its ability to curate snaps in real time from that massive base with a light touch of editorial sprinkled on. From a Snapchat perspective, this is so much more compelling than a CNN video on Discover.
But the big boys of media, breaking news should be happening on Twitter IMO. Twitter should be to CNN on mobile what their cable channel is to them in the living room. If I were Twitter, I would go out and make that happen ASAP. Huge missed opportunity for Twitter this year for not already arriving there given how much this circus of a presidential election has brought eyeballs to CNN.
7) Smaller / Local Events
While the headlines will be using Twitter to watch the NFL, the VMAs, and the Presidential debates on their phones, the same model and UX can apply to all kinds of smaller, local events too, in most cases, events without the complicated deal structures the big events need, making this approach very scalable.
If Twitter can navigate this path and carve out ownership of Live Events & Live News for mobile, and focus the product experience around that, there is major upside. Because guess who loves premium, live concurrent viewing more than anyone else — national advertisers. Event programming on TV — sports, awards shows, debates, etc…and guess who has a pretty killer advertising team and business already — Twitter. What a wonderful combination.
If they can combine that with applying Fabric to Facebook’s ‘Build-Grow-Monetize’ ecosystem but super focused on this world of real time, now, live events and news, pretty cool as well.
Oh, and if they should arrive there — owning Live Events and News on mobile — well boy oh boy do they slot in nicely to the Google ecosystem. Google has struggled a bit with Google Now & AMP in owning a similar space. And its not happening on YouTube. And man have they shit the bed on social. But it does happen on Search. Imagine combining Search AND the premium, live coverage AND social chatter around Events & News. That is the kind of virtuous cycle and monopoly market that Google loves.
I have no idea what they are planning up there in Twitter land, but I know they must be taking a big swing somewhere soon if they are going to turn that ship around. I do think its possible. So I’m buying some Twitter stock right now and betting on the turnaround. Go Jack Go.