Popular social media network, Twitter Inc (NYSE:TWTR), won a bidding war for digital rights to the National Football League NFL games. The price was described by Bloomberg reports as a bargain price. According to people familiar with the deal, the deal cost $10 million for 10 Thursday night games, which puts the cost per game at $1 million.
Most people are viewing the win as a coup for Twitter. This is because the company has been going through a rough patch and was not initially considered to be a frontrunner to win the awards or a strong competitor at least. Earlier reports before the deal had been done of potential bidders for the digital rights did not even have Twitter on them. The NFL clearly deviated from their Commissioners monetization-driven reign. They confirmed that they had not taken the bid with the most money.
Of note is that the current chief financial officer of Twitter, Anthony Noto, served under Roger Goodell for the NFL before leaving in 2010, which might have given them (Twitter) a slight advantage partnership-wise.
The highest bidder so far has not been mentioned with others suggesting Facebook was the unlucky high bidder. Reports had indicated Facebook was going to bid for the digital rights, and it was confirmed when the Vice President of Partnerships at Facebook, Dan Rose, admitted that his company was bidding for the digital rights after an interview with Variety magazine. Facebook is unlikely to take a blow though because it still has its live streaming services to take care of.
Facebook continues to grow live content. Where is Twitter?
Reports indicate that Facebook Inc (NASDAQ:FB)’s CEO and founder, Mark Zuckerberg, is “obsessed” with the live stream service and has made it a top priority. The service is starting to pay dividends. Zuckerberg noted that at least 100 million hours of video were being watched every day. Facebook is making plans to grow that figure by putting the live icon in the front and center of the mobile app, and also introducing a live icon which will replace the Messenger icon.
The news could be a blow for Twitter since they have struggled in the wake of their IPO as a decrease in monthly active users growth has weighed on returns. The NFL deal might be a way to increase that number, but Facebook plans to challenge Twitter’s Periscope live video streaming service. It’s unclear as yet on how Twitter plans on streaming the live video NFL games, with Periscope their best chance at streaming live content.
Twitter purchased Periscope for $55 million last year, and the NFL deal is worth $10 million this year and will most likely increase yearly. Facebook has benefited from its 1.6 billion users for a steady monthly active user base while Twitter only has 305 million non-SMS monthly active users. The size of Facebook is likely to do more to help grow the live streaming hours effectively, than the ten games Twitter has would do.