BTIG Says Twitter Is Betting The Farm On Live Sports, Video To Court Media Giants' Interest

Twitter Inc TWTR is betting its future on the potential of live sports and may be trying to "court" legacy media companies such as Walt Disney Co DIS, Twenty-First Century Fox Inc FOX FOXA, NBC, CBS Corporation CBS and Time Warner Inc TWX, according to a note from BTIG.

Legacy Media

But, the million dollar question is whether Twitter will be a good fit with any of the above legacy media firms. Another hiccup is Twitter would be a big acquisition for media giants with its $13 billion market cap and $2 billion net cash.

Related Link: Is Twitter's Monetization Strategy Improving?

Richard Greenfield of BTIG said Twitter could be the antidote to address the mobile shortcomings of the media giants who already invested heavily in news and sports. They can leave the mobile part to Twitter, while remaining focused on their content verticals.

Q1 Earnings Call

Twitter is placing more emphasis on live content, and the management comments during the first quarter earnings call reflects the social media company's strategy.

CEO Jack Dorsey said, "We're going to invest in being a leader in live-streaming video, building off our lead with Periscope."

"Marketers who are running campaigns on Twitter, especially video-centric narratives, are looking to attach themselves to great highlights or other pieces of content that might otherwise organically trend on the platform. We also are continuing our efforts to monetize that inventory hand-in-hand with those partners. So this is a joint revenue, a win-win and a joint revenue relationship between the partners."

COO Adam Bain said, "Live sports, live premium content is a way to communicate something that's very familiar to people, something we know they want based on their interest on Twitter, and to deliver that in an instant, not just with that live video, but all of the great conversation and tweets that are attached to it, and expose those that haven't used Twitter to that great content and those that are, a complete solution. So we're really excited about the opportunity to use it as a complete solution."

Headwinds

That said, Twitter is having its own problems in terms of stiff competition from Facebook Inc FB, Snapchat and other global messaging platforms looking to expand themselves.

"If Twitter fails to stimulate usage with live video, it could likely be acquired for far less than it is trading today; on the other hand, the longer legacy media companies wait to enter mobile in a big way, the farther behind they become and the more powerful the mobile gatekeepers become," Greenfield wrote in a note.

Greenfield has a Neutral rating on Twitter. Shares closed Monday's regular trading session at $18.65.

Full ratings data available on Benzinga Pro.