We’ve seen ESPN parent company Disney strongly focus on streaming video recently, from their acquisition of MLB’s BAM Tech to their push towards over-the-top ESPN streaming options to their investments in the likes of Vice and Hulu, and their reported interest in making a bid for Twitter may be about that as well.
Twitter has been expanding their push into streaming video by gaining rights to NFL, MLB and NHL, and college sports games amongst others, and their Thursday Night Football streams in particular have generally gone well (although advertisers were hoping for more). As Bloomberg’s Alex Sherman and Sarah Frier report, video streaming is believed to be why Disney is discussing making a bid for Twitter:
The Walt Disney Co. is working with a financial adviser to evaluate a possible bid for Twitter Inc., according to people familiar with the matter.
After receiving interest in discussing a deal, Twitter has started a process to evaluate a potential sale. Salesforce.com Inc. is also considering a bid, working with Bank of America on the process, according to other people, who declined to be named because the matter is private.
…Speculation that Twitter will be sold has been gathering steam in recent months, including last week’s news of Salesforce’s interest, given the social media company’s slumping stock price and difficulties in attracting new users and advertising revenue. Disney, if it decides to make a bid, would be able to help the company further its video-streaming media strategy. Jack Dorsey, chief executive officer of Twitter, is also on the board of Disney.
…“It’s a video distribution play,” said James Cakmak, an analyst at Monness Crespi Hardt & Co. “What Disney has to think about is what is its place in a post cord-cutting world. They are investing in technology for distribution — and this would give them the platform to reach audiences around the world.”
Disney obviously already has substantial distribution technology and reach, especially after their acquisition of a third of BAM Tech (with the opportunity to buy more), but Twitter might give them further opportunities there. Bringing Twitter in-house would also remove a competitor for streaming sports rights, and could provide particular synergies; given how important streaming sports is becoming for Twitter, having expanded access to even a part of ESPN/ABC’s vast portfolio of sports rights could really help them.
Of course, Disney would have to be careful how they integrated this, as they wouldn’t want to remove the incentive for people to subscribe to traditional ESPN (or to the planned new light over-the-top ESPN options). They would also have to be careful just how much they bid for Twitter, a service that has often struggled to monetize its user base (and is still facing those issues even with its streaming sports content).
Still, there are enough areas of overlap that it makes tons of sense for Disney to at least look at this. Whether they actually make a bid is more questionable; as Re/code’s Peter Kafka notes, Twitter would likely cost more than Disney paid for Marvel, Lucasfilm and Pixar combined, and Disney’s media competitors might be leery about working with a Disney-owned company. We’ll see if anything comes of it, but at least this provided plenty of good jokes about what an Disney/ESPN-owned Twitter might look like:
This new Disney Twitter better make Chris Berman woop! sounds when I hit tweet
— KOBE BUFFALOMEAT (@edsbs) September 26, 2016
New Disneyland rides: "Trolls of the Caribbean," "Water Slide Into My DMs," "It's A Character Limit, After All."
— Medium Happy (@jdubs88) September 26, 2016
"All the birds tweet words, 140 characters or less…. in the Twitter, Twitter, Twitter, Twitter, Twitter Room!" – Walt Disney pic.twitter.com/f99vfzsT2Q
— Brad Jost (@BradJost) September 26, 2016
Lots of synergy possible if Disney buys Twitter, like a ride at Disneyland where eggs hurl abuse at you.
— Paul Fairie (@paulisci) September 26, 2016
— Downtown Josh Brown (@ReformedBroker) September 26, 2016
If Disney buys Twitter we'll only have 139 characters because one always dies.
— Kyle (@KyleKoster) September 26, 2016