Twitter is basically becoming a cable company.
The social network’s paid deal with the NFL to show Thursday night football games gives Twitterexclusive rights to stream the matches over the Internet. What this means for sports fans is access to another channel to watch the most popular professional sport in the country, presumably so long as they’re willing to see a slew of promoted tweets on Twitter’s website.
It’s akin to what the television industry has done for decades: Provide live events in hopes of growing an audience while making tons of money in advertising doing it.
Twitter isn’t about to stop there. It’s considering expanding from live sports coverage into political news and other types of video content, the company’s chief financial officer, Anthony Noto, told Bloomberg News.
If that happens, Twitter will have built a bundle that isn’t much different in style from what you get from Comcast, Verizon or many of the heavyweight TV distributors that currently dominate America’s entertainment ecosystem. It might be a skinnier one, but it’s a bundle nonetheless.
It’s similar too, to the package of “channels” that companies such as T-Mobile have been building. By partnering with Netflix, Google, NBC and others, the wireless carrier has effectively built its own suite of video content that consumers can watch on an unlimited basis without blowing through their monthly data plans.
All this activity threatens to put more pressure on traditional cable firms that are struggling to meet consumers where they are – on mobile devices and on the Internet. But as Twitter explores video distribution more aggressively, cable officials predict the company will bow to some of the same constraints that have affected their industry for years.
“History has shown . . . sports fans get hooked on the programming, then the league charges more for the rights, and then the programmer spreads the cost to all subscribers to pay for it,” said Matt Polka, chief executive of the American Cable Association. “I hope that doesn’t happen, but I believe it will.”
Twitter on Wednesday rejected the idea of charging anyone for its stream.
“We never talk about future products, but that couldn’t be further from the truth,” the company said.
By Polka’s logic, offering live sports and other shows will become so expensive for Twitter that it may be forced to find additional revenues to cover the costs.
It could even try to seek payments from Internet providers, he said. But, he added, although federal regulators have rules in place to make sure Internet providers don’t abusively target individual websites for revenue, their authority doesn’t run the other way. The Federal Communications Commission has explicitly ruled out using its net neutrality policies to regulate companies like Google, Twitter andNetflix. (An agency spokesperson did not immediately respond to a request for comment.)
In the cable industry’s view, this represents a perversion of regulation – Twitter could start behaving like a cable firm but would be more lightly regulated than an actual cable company.
But that perspective overlooks one key difference, according to Rich Greenfield, an analyst at BTIG. Twitter providing live TV just gives consumers another way to watch sports; it doesn’t mean Twitter is about to become a gatekeeper.
“To me, this was the least threatening way for the NFL to dip their toe into digital streaming waters,” said Greenfield. “Twitter is not going to be a competitor to multichannel video.”
Recent surveys appear to bear that out. Despite the growing popularity of cord-cutting, only about 15 percent of Americans have actually committed to it, according to the Pew Research Center. Add in those Americans who have never had cable or satellite TV, and the share of people without pay-TV rises to 24 percent. That’s substantial, but it still leaves 3 out of 4 people who subscribe.
And in addition to being streamed on Twitter, the NFL games will still be available on traditional viewing methods such as broadcast TV and cable.
What the cable industry’s complaints really reflect is a rising anxiety about their business model, and a growing inability to use regulation as both a shield and a cudgel, according to consumer advocates.
“They’re all entities that have bemoaned the role of the government in regulating their businesses,” said Gene Kimmelman, the chief executive of the advocacy group Public Knowledge. “And the moment the government comes along and says, ‘Oh, we’re not going to touch the [websites], all of a sudden it’s almost like the fear of the marketplace has them wanting to run back to the old way.”
© 2016 The Washington Post