On the eve of its earnings report for the first quarter of 2017, things aren’t looking too good for Twitter. This has, of course, become something of a pattern, as Twitter’s user growth has stagnated over the past two years. Is it any surprise that the company has been reporting earnings at the crack of dawn? Bleary-eyed tech journalists be damned!
But this quarter, analysts are predicting that even Twitter’s revenue could take a hit. For the first time since it went public, analysts are expecting a drop in year-over-year revenue. Their prediction: Twitter will see a 14% decline in revenue, from $595 million in Q1 last year to $512 million this quarter. As Twitter noted in its letter to shareholders last quarter, this is to be expected, given a decrease in ad revenue during Q4 and the “escalating competition for digital ad spending” (read: Snap and Facebook are gobbling up ad dollars). Plus, Twitter reportedly cut back on ad products like promoted tweets, in favor of investing more in areas like video.
Can Live Video Save The Day?
One bright spot in last quarter’s earnings report was indeed its live video push: Twitter streamed 600 hours of live video in Q4, attracting 31 million unique viewers. But those gains could be attributed to the election cycle and its Thursday Night Football streaming deal with the NFL, which Twitter has since lost to Amazon; it’s unclear what its video scoreboard will look like for this quarter.
Twitter has recently attempted to shift the focus from its sluggish growth in monthly users by emphasizing an upswing in daily user activity. This also explains why most of Twitter’s announcements over the past couple months have centered on curbing abuse—from limiting the reach of abusive tweets to nixing the default egg icon, which became synonymous with troll accounts. This isn’t to say Twitter has given up on acquiring new users, but the more optimistic goal now, it seems, is upping the engagement of existing users.
As Recode wrote earlier today, we might see renewed talk of a sale now that Twitter’s market cap has dipped to just over $10 billion. In fact, Twitter’s shareholder meeting next month will address a proposal to turn the company into a co-op—the unlikely result of a petition penned by users who worry a sale might compromise the platform. There might be hope after all.