'They seem to actually care if we make money': Media companies are falling back in love with Twitter
- In light of Facebook's algorithm shift, media companies increasingly see Twitter as a more attractive distribution partner.
- Not only is Twitter well suited to news content, but it's seen as a rare tech platform that seeks equitable deals with publishers and understands their business.
- Still, media executives are somewhat concerned that their Twitter champion - former COO Anthony Noto - has departed. They're hoping his pro-media strategy remains.
As many media and marketing executives were in the midst of navigating their way home from the Consumer Electronics Show in Las Vegas last month, the news broke. Facebook was dropping the hammer on publishers, by de-emphasizing what it considered "passive" content.
Almost immediately, some publishers heard from senior Twitter leadership. Their message: we're there for you.
Like an overlooked but secretly beautiful best friend in a 1980s teen movie, media companies, particularly news brands, are starting to realize that even as they've chased Facebook's love, Twitter's been right their under their noses the whole time.
And while every digital platform has its strengths and weaknesses, Twitter is seen as a rare Silicon Valley company that understands, and even - gasp - likes the media and advertising business.
Increasingly, media companies say that Twitter has found a sweet spot as a true programmer with a unique strength in live video. And more importantly, it's a reliable revenue producer known for making balanced, high upside revenue deals. That stands in stark contrast with Facebook, which has angered many in the media industry by constantly jerking around partners - or failing to treat content companies as partners at all.
While some in the media industry worry that they've just lost their top champion at Twitter in recently departed COO Anthony Noto, who was named CEO of the digital bank Sofi just after CES, most are cautiously optimistic, while still eyeing most overtures from tech platforms with a wary eye.
Starting to build a sizable web video lineup
Last spring, Twitter delivered a big sales presentation during the Newfronts, an annual week-plus long parade of pitches from web video content companies seeking advertisers, for the first time. It's meant to be digital media's answer to the broadcast networks' yearly rollout of their fall shows for the ad community.
When Twitter's name popped up on the Newfront schedule, some snickered. Does that mean the NewFronts are over?
Yet Twitter's video output and list of partners continues to surge. Yes, there are plenty of random live feeds from professional lacrosse games and the like. But over the past few months the company has inked deals with Time Inc. (now part of Meredith Corp) to host PeopleTV, as well as Bloomberg's ambitious live news channel TicToc. According to Digiday that network is already pulling in 750,000 viewers a day.
Those projects join the likes of fast growing business network Cheddar - a Twitter stalwart- as well as BuzzFeed's daily morning show AM to DM. "They know they have something with live," said one media source. "It plays to their strengths."
Overall, Twitter says it streamed over 1,100 live events during the fourth quarter of last year, while announcing 22 new live streaming deals. Already this year, the company has inked 20 more such partnerships, said Matt Derella, Twitter's vice president of global revenue and operations. "The quarter's only half over, so that really signals the momentum we have," he told Business Insider.
'They seem to care if we actually make money'
Amongst a sea of content deals with giant platforms that don't always feel favorable to those that make content, Twitter's approach stands out for being deliberately equitable - particularly compared to Facebook's take-it-or-leave it negotiating style and string of fits and starts (see: Facebook Live really matters. No it doesn't).
Of course, every content deal between media companies and tech platforms is different. As insiders explained, some content pacts resemble TV in their structure, in that the tech company pays a set per-episode fee upfront.
This theoretically allows a media company to aim for a higher level of production - but the profit margins are thin and the upside limited (especially if the platform secures ownership of the show), insiders say.
On the other end of the spectrum, say media executives, are revenue share deals without any guarantees. These arrangements have been common on Facebook, which has cycled through various ad initiatives for video (from 'suggested videos' to mid-roll ads on Facebook Watch).
"It's basically cross your fingers and hope the model kicks in," said one digital media veteran.
Twitter has found a solid hybrid model. The company will partially fund some projects upfront, say insiders, so that media partners can aim high in terms of quality.
But then, media firms can make a lot more money if their shows succeed, since they often control future ad sales. "There is still plenty of upside," said a top media executive.
As one media executive put it, "They seem to care if we actually make money." Not to mention that the media and ads business is still driven by relationships, which Twitter seems to care about.
"What I've found from Twitter, especially through launching TicToc, is that there is an openness at the senior level to work with us, collaborate with us to do something bold," said M. Scott Havens, global head of digital, Bloomberg Media. "There was support throughout the entire process and an openness to create and build a product that is mutually beneficial for both sides."
Twitter's Derella said that approach comes from working with content partners on ad revenue deals for over five years, starting with ad-supported college football highlights delivered to Twitter via ESPN in 2012.
"We are very much in tune with what their needs are," said Derella of media partners. "We want to help them grow their reach and help them build their business. We are laser-focused on that."
Last week, Twitter announced that payouts to publishers on Twitter were up 60% in 2017.
Over time, "we've aimed to be fair and rational in our deals," he added. "That's served us incredibly well."
There are plenty of other options, and lots of uncertainty
Of course, Twitter is far from the only game in town. And it's user base, while sizable at 300 million monthly users, has seemingly plateaued, and is not nearly at large as Facebook, YouTube, or even Instagram.
If anything is certain when it comes to which tech giant is viewed as best catering to media companies, it's that things change fast. For example, on Friday, Bloomberg reported that YouTube was sending mixed signals about its original content strategy. Meanwhile, Snap is ramping up its video series output.
Regardless, the fallout from Facebook's algorithm shift has been evident. Witness Vox Media's decision to lay off 50 staffers last week, which was driven by a shift away from news feed video.
At the same time, while Facebook's vacillations have infuriated many, it continues to ink programming deals for Facebook Watch. And digital publishing executives rave about Instagram's potential for content.
What's helping Twitter right now, in the eyes of media executives, is that it's made for news. While it hasn't been spared by trolls or fake news, its audience is generally there to read and watch, not see baby pictures.
"It's a better place for content in the first place," said one media veteran.
Discovery is a obstacle
Here's a challenge nearly every Twitter media partner brings up: discovery. With all these original live shows flooding people's already noisy Twitter feeds, it's not easy for people to discover these shows. Of course, the same could be said for finding shows on YouTube, Facebook, Instagram, or anyplace else on the web.
Media partners and Twitter both have to work to make sure that consumers make watching live shows a habit, and not a happenstance.
One key tactic so far, according to media executives: featuring people with big social media followings on your show. It's a strategy you see BuzzFeed and Cheddar employing all the time.
Derella said that Twitter is actively working on helping people find live videos by promoting them in prominent sections of the Twitter product, including its "Happening Now" feature, which showcases prominent tweets about events like the Olympics, and also it Explore tab.
Over time, the hope is that each individual sees more of the kind of shows he or she will be interested in, rather than everyone getting the same flood of videos. "We wanted to develop a very personalized experience," he said. "That's the organizing principle."
What happens after Noto?
Former COO Noto was seen as Twitter's big dealmaker. He'd personally connect with media company CEOs and business development executives. And he'd show his face at major industry events like CES and the Cannes advertising festival.
Now that he's gone, media executives are hoping that Twitter's strategy stays intact. While it's hard to get a read on CEO Jack Dorsey - who most ad industry executives don't know - insiders are cautiously optimistic.
"That team is still intact," said a partner.
Todd Swidler, who leads Twitter's live video team, is well regarded. When Noto announced his move, the company said that Derella will continue to lead Twitter's ad sales efforts while Kay Madati, who Noto hired last year, is in place to oversee content deals. Both should be in contact with media partners regularly.
Either way, Twitter's place in the web video ecosystem appears solid. The company should have lots to talk about at its second NewFront event in May.
"It's not perfect," said a partner. "But it's worth it. You feel like you're in it together [when you work with Twitter] and the opportunity is much bigger because of it."
"There is a lot of money there."