In February 2015, Business Insider was the first to report that Twitter had acquired a startup app that hadn’t even launched yet. The app was called Periscope, and it was designed to enable anyone in the world to stream live video right from their phone. Twitter paid handsomely for the exclusive rights to it. From Business Insider: “One investor source says the acquisition amount was ‘sizeable,’ above $50 million. Another says it fell between $75 and $100 million. A third says the deal was ‘small-ish.’ Size is all relative, we guess.”
The live-streaming app isn’t the first pre-launch app that Twitter has snatched up before it went to market. A few years ago, Twitter bought the micro-vlogging app Vine while it was still in its beta stage. That deal was reportedly worth tens of millions of dollars, a wise investment as it turned out: Vine is hugely popular with a diverse demographic. Everyone from teenagers to big brands like McDonald’s uses the app every day. However, Vine isn’t quite as big of a hit as Twitter and its investors would have liked it to be. Periscope, however, is different. This app fits much better into Twitter’s philosophy of disseminating information in real-time.
The idea of the Periscope app is certainly a powerful one: events happening all across the globe-- from those as mundane as cats doing cute tricks to serious newsworthy events-- can be displayed instantly in the palm of users’ hands, with no filter or intermediary. Periscope also has huge potential for an industry that really drives the tech market: advertising. Brands can use Periscope to deliver their message to consumers through less invasive, more indirect methods. Online video ads are expected to generate over $17 billion in revenue by 2017. Fortune magazine’s Kia Kokalitcheva writes: “Periscope’s video broadcasting format would create a huge opportunity for Twitter to capture a solid chunk of that revenue, provided it figures out a way to build ads into the product. Promoted or sponsored live streams would be one obvious way.”
The mobile-only aspect of Periscope fits well into Twitter’s business model, too. Twitter has nearly 300 million users, and over 80% of them are mobile users. Mobile is also at the center of Twitter’s advertising revenue, making up nearly 90% of their total ad revenue. That 90% is no small chunk of change: Twitter made over $430 million in total ad revenue in the fourth quarter of 2014 alone.
While Periscope has investors excited again about the company’s potential, for a time there was a possibly competitive spoiler app out there, and it’s name was Meerkat. Meerkat is another mobile live-streaming app that was a huge hit at the 2015 SXSW festival in Austin, Texas in late February, helping to generate plenty of buzz. Meerkat launched to the public just a few weeks before Twitter acquired Periscope. Twitter responded to their launch by turning off Meerkat’s access to its data. The move was devastating to the startup. In late March 2015, in the same week that Periscope came out of beta and was launched to the public, Meerkat announced that it was receiving a $14 million in new investments. But it wasn’t enough. In less than a week after its release, Periscope had clearly become the winner in the live-streaming app battle. Periscope was in the iTunes app store Top 30 Apps on the same day that Meerkat dropped to somewhere around number 500.
While it might be premature to declare Meerkat dead and Periscope the winner, the investors seem to have spoken. It’s not outside of the realm of possibility that Meerkat could make a comeback, but its chances are slim. The main difference between the two right now is that Periscope will show you via Twitter which of your followers are also Periscope users. Because Twitter closed off sharing their data to Meerkat once they bought Periscope, Meerkat users won’t be able to find fellow Meerkat fans via Twitter. Another difference is how they save broadcasts. Periscope automatically saves a copy of all broadcasts for 24 hours, while Meerkat users must actively choose to save the broadcasts. Meerkat allows you to schedule broadcasts in the future while Periscope does not. Another difference is that Meerkat automatically tweets a link to all of your followers once you begin streaming. With Periscope, you need to actively opt-in to sharing that link.
These are all minor differences to be sure, but slight differences are what makes people loyal to one app over another. It’s important to note that neither app is available for Android yet. Once the apps move beyond the iOS market, a true definitive winner can be declared.
Periscope users are still definitely in the early stages of figuring out how and why to use the app. Everyone seems to be very excited about the ability to live stream video, even if they haven’t discovered a legitimate reason to do so. One meme that has become popular is to live-stream the contents of your refrigerator when you can’t figure out what else to show. As this is being written, one of the streams on the Watch screen is a rainy ride to Manhattan on the Staten Island Ferry, and another is a young man in Ireland using a blow dryer to dry his damp socks. But obviously the potential for the app is huge, especially when people know when to tune in to scheduled events.
Privacy was also an issue on the app in its early stages. Periscope updated the app on April 2, 2015 to remove a feature that automatically revealed the user’s location down to the intersection, potentially revealing the home addresses of users in real-time. Since the update, users must actively opt-in if they want to show their location.
One final consideration about the app is data usage. If you are linked up to Wi-Fi, you won’t need to worry about how much you stream or watch. But if you’re depending upon mobile data to use the app, you could go through a month’s worth of your data plan in no time. Who knows -- if the app is the huge hit that some expect it to be, it might have the potential to change the way mobile providers charge for data.
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