Here’s How Twitter Is Looking To Monetize Periscope

Increase In Advertising Revenues As More “Influencers” Are Attracted To Periscope

In March this year, Periscope completed one year since its launch.  During this period, 200 million broadcasts were created on the platform and 110 years of live video are watched on Periscope every day. As of December 2015, Periscope had 10 million users.  Given its popularity and Twitter’s focus on live streaming, a monetizing opportunity can attract more users to Periscope and encourage regular users to increase their frequency of live broadcasts. Advertisers are already attracted to live videos.  As an increasing number of viewers watch more live video content on their mobile devices, advertising on Periscope broadcasts can drive revenues for Twitter. 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. According to our estimates, Twitter’s annual revenues from Periscope by 2018 could range from $72 million to $144 million, depending on the number video minutes used in ads. This number is also dependent on both the total video minutes broadcast on Twitter and the revenue sharing arrangement with the content providers. Our estimated revenues from Periscope for 2018 are not very significant, compared to total Twitter revenues.  That said, we believe this platform holds a strong potential for the company in the long term. As the company starts to monetize this platform, there could be several revenue generating opportunities which the company can identify as usage increases. Attracting key influencers to this platform is critical for Twitter.  We believe introducing the Amplify program to Periscope is the right first step taken by Twitter in this direction.