The Opportunity in Twitter’s Video Push

Digital video race

Twitter (TWTR) is making a spirited push into the online video market as it works to attract more subscribers and advertisers to its social platform. In 2Q17, Twitter’s monthly subscriber base failed to grow, and its revenues declined about 5% from 2Q16.

Social media companies such as Twitter, Facebook (FB), Snap (SNAP), and Alphabet’s (GOOGL) Google are incorporating more video content in an effort to boost platform engagement and deliver better ROI (return on investment) for advertisers.

The Opportunity in Twitter’s Video Push

Twitter’s unique video viewers up 22%

Twitter noted that it made significant strides in its video push in 2Q17. The company stated that it served more than 1,200 hours of live premium videos during the quarter—up from 900 hours of live videos in 1Q17 and 600 hours of live videos in 4Q16.

Twitter added that its live video offering in 2Q17 spanned 625 events and reached more than 55 million unique viewers, implying an increase of 22% from 1Q17.

The company noted that it had more than 200 premium video partners at the end of 2Q17. Twitter’s video content covers areas such as sports, news, and entertainment.

More than $4 billion in social video ad market

The online video market has demonstrated tremendous potential in the past few years (QQQ) (XLK). According to Magna Global, social video ad sales are poised to double their growth in 2017 over 2016. As such, the market is expected to be worth more than $4.0 billion by the end of 2017, as illustrated in the chart above.

Controlling even a fraction of this rapidly growing social video ad market could positively impact Twitter’s financial status.