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Twitter to Take Part in Digital Content NewFronts Event

Zacks Equity Research

Twitter, Inc. TWTR is set to participate in the Digital Content NewFrontsevent and will display its content and live streaming offerings to prospective advertisers. The Digital Content NewFronts, founded by AOL, DigitalLBi, Google, YouTube, Yahoo, Hulu and Microsoft MSFT in 2012, is an annual event to promote partnership among brands and digital content providers. Management will give a detailed presentation on May 1, 2017 in New York City.

Twitter has been aggressively promoting live video to battle sluggish user growth. Online video is the most lucrative component of digital advertising. 

Consequently, Twitter is trying to bring more video content to attract ad dollars. Ad revenues contribute the lion’s share of its total revenue. It intends to capture the opportunity presented by ever increasing video viewing on social media platforms.

The company has been signing live streaming deals with several companies. Last year, Twitter signed live streaming deals with Bloomberg, PBS NewsHour and BuzzFeed as well as sports organizations like  NBA, MBL, NFL,  Not just Twitter, given the ad revenue potential, all social media companies right from Facebook FB to Snapchat are pumping huge resources to increase live video viewing on their platform. 

Twitter, Inc. Price

Twitter, Inc. Price | Twitter, Inc. Quote

Also, to make the viewing experience better, Twitter has enabled live video broadcasting from its app just via a tweet. Notably, Twitter users earlier required Periscope for creating and broadcasting videos.

Per Twitter, in the fourth quarter of 2016, the company streamed 600 hours of live premium videos across 400 events involving 31 million unique viewers. As much as 33% of the viewers of the live video streaming were from outside the U.S., among which 50% were below the 25 years of age.

Currently Twitter carries a Zacks Rank #3 (Hold). Over the past one year, shares of Twitter are down 9.85% compared with 8.49% growth in the Zacks categorized Internet Services’ industry. 

Twitter investors have been losing patience and one can hardly blame them. The company has been witnessing sluggish user expansion and revenues have grown just 1% year over year in the recently reported quarter. We note that Dorsey’s strategy of focusing on live and user friendly changes have not generated the desired results for Twitter.

Key Picks

A better-ranked stock in the broader technology space is j2 Global, Inc. JCOM, sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the Zacks Consensus Estimate for j2 Global’s current year has improved to $5.59 from $5.21 over the last 60 days.

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