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How Twitter Hopes to Profit from Cord-Cutters

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More than a dozen live streaming deals

Soon after reporting better-than-expected 1Q17 earnings, Twitter (TWTR) announced more than a dozen new live streaming partnerships in areas covering sports, music, and news.

Twitter inked a deal to air 20 WNBA[1. Women’s National Basketball Association] regular season games, and the agreement covers the next three seasons. The partnership with the WNBA is intended to compensate for the loss of the NFL’s Thursday Night Football rights to Amazon (AMZN).

On the music front, Twitter has partnered with concert promoter Live Nation, which allows Twitter to live stream a series of concerts on the platform.

With respect to news, Twitter has partnered with Bloomberg for a 24-hour news service. The deal with Bloomberg would strengthen Twitter’s position as an online destination for breaking news.

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$36.0 billion up for grabs

With the new live streaming partnerships, Twitter is hoping to increase its share of the social media advertising market. Research firm eMarketer says worldwide social media advertising spending could reach $36.0 billion this year, increasing from $23.7 billion in 2015, as shown in the chart above.

Twitter’s live streaming strategy suggests that at least for now, the company is keen to tap the cord-cutting trend without taking the more expensive route of producing its own original programming, as Netflix (NFLX) and Amazon have been doing.

Highly competitive market

To bolster its fortunes in the digital video market, Twitter must weather competition from Facebook (FB), Snap (SNAP), and Alphabet’s (GOOGL) YouTube. These companies are also trying to strengthen their online video positions.

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