Wall Street is waking up to Social TV’s revenue-generating potential for Twitter.
As analysts begin their coverage of the stock, several are already advising investors that Social TV is likely to provide significant upside for Twitter.
Robert W Baird analyst Colin Sebastian is particularly bullish on Twitter as a Social TV platform and the prospects for tapping television advertising revenue via Social TV.
“Intersection of TV and Twitter provides gravitational pull. Given the live, structured and public nature of Tweets, we believe this is one of only a small handful of Internet platforms capable of opening the proverbial floodgates of TV ad spending. We estimate that within the next 10 years, Twitter will absorb as much as 5% of the $200 billion TV ad market.”
Susquehanna analyst Brian Nowak is more measured, regarding Twitter as “still in its monetization infancy.” However, Social TV is very much part of Twitter’s future, via Twitter Amplify video sponsorship and second screening.
“Our analyses of four of TWTR’s greatest monetization opportunities – 1) evolving into a real-time personalized magazine; 2) mobile advertising; 3) improved ad units like video and app installs; and 4) innovating around its second-screen viewing to catch experimental TV ad dollars – highlight the long-term optionality for substantial earnings upside.”
UBS analyst Eric Sheridan expresses concerns that new users are struggling to understand the platform, but nevertheless sees considerable promise in Social TV.
For the immediate future, Twitter’s management needs to focus better on the service’s core product use cases. These use cases could eventually expand to include news and content consumption, communications and/or a second-screen platform, for Social TV watching.
Sheridan comments, “Future growth initiatives (MoPub, Vine, Big Data, Social TV) could provide material upside to our estimates.”
With over a billion Facebook, Twitter and mobile messaging users discussing their TV viewing on second screens, Social TV is crucial for ratings success and advertising effectiveness.
Futurescape’s Social TV report is the most comprehensive and authoritative analysis of this complex and vibrant digital sector, consulted by media executives worldwide.
It provides a full strategic context and data to plan Social TV activity, set targets and evaluate results, for broadcasters, producers, advertisers and agencies.