Trading At The NYSE As U.S. Stocks Join Global Slide
A monitor displays financial news about Twitter Inc. at the New York Stock Exchange (NYSE) in New York, U.S., on Thursday, Feb. 11, 2016.  Bloomberg Bloomberg via Getty Images

Twitter Is Trying to Become TV—But So Is Everyone Else

May 02, 2017

Twitter has talked for some time about wanting to be the go-to destination for streaming video, and on Monday, it put its money where its mouth is by announcing deals with more than a dozen publishers and content companies, from Bloomberg to the WNBA.

Twitter is undoubtedly hoping that all of this proprietary content will help to pull in new users—as well as retaining the users it already has by convincing them to spend more time with the app. But the primary goal of its video strategy is boosting advertising revenue.

Video ads can be extremely lucrative, and Twitter needs all the help it can get in that department. Its revenue actually fell last quarter for the first time, and the company warned that its advertising sales will likely continue to be weaker than previously expected for some time to come.

All of this means that Twitter is extremely motivated when it comes to making its video push successful. Unfortunately for the company, everyone else is also chasing those juicy video ad dollars, including deep-pocketed behemoths like Facebook and Amazon.

Facebook, for example, is not only paying media companies to produce live video content, it has set up a division that is financing, licensing, and creating live TV-style programming. And it dwarfs Twitter both in terms of the size of its user base and its ability to spend.

In all, Twitter announced streaming deals with 16 content providers on Monday, most of which fall into the category of either news or sports.

On the news side, Bloomberg will provide a 24/7 channel of custom content, including verified videos from Twitter users, and there will be shows from BuzzFeed, The Verge, and Cheddar, a financial-news startup run by former BuzzFeed president Jon Steinberg.

When it comes to sports, Twitter announced deals to carry streaming content from the WNBA, Major League Baseball, and the PGA Tour, as well as a live show produced by The Players Tribune, a site co-founded by former baseball star Derek Jeter. The company also signed a partnership with concert producer LiveNation to stream some of its events.

Twitter has a deal with the NFL too, but the details of that arrangement illustrate some of the challenges it faces as it tries to pivot to become a digital-television platform.

The current deal with the football league no longer includes the right to show actual games. Twitter had the rights to Thursday games last year—for which it paid an estimated $10 million—but it was outbid this year by Amazon, which paid five times what Twitter did.

What Twitter has now is the right to show pre-game and/or post-game content that will be produced by the NFL. In other words: commentary, highlights, and more.

When it comes to the WNBA, MLB, and the NFL, Twitter has the rights to stream actual games. But is that going to be enough of a draw for a significant number of users? That's unclear. Even having the rights to Thursday night NFL games last year didn't seem to generate much bang for Twitter, either in user growth or revenue.

Get Data Sheet, Fortune’s technology newsletter.

The bottom line is that Twitter's push into live video means it is becoming a media company—or at least it is trying to. And that is problematic for a number of reasons.

Social networks in general get free content from their users, and then try to sell advertising and other services related to that. Media companies, however, have to either create or cut deals with other publishers for their content, and then sell advertising around it.

The biggest problem is that this strategy can be expensive, at least if you want to get the really good content, like live NFL games. That's why media companies tend to be valued much lower on the stock market than technology companies are. And Twitter simply doesn't have the financial means to compete with players like Facebook, Amazon, and YouTube.

That's not to say there won't be some good content coming from Bloomberg or BuzzFeed or Cheddar in the shows and segments they produce for Twitter. And there will probably be advertisers who want to sign up to reach some of those users. The company has already announced Wendy's as an initial sponsors, and said it hopes to announce more soon.

What's unclear, however, is how much Twitter is giving up in return for these deals, versus how much it stands to make from ads. And therein lies the difference between profitability and failure.

It remains to be seen how many Twitter users want to actually watch live video news and sports programming through the app, and whether Twitter can convince advertisers that those users are worth paying for in enough quantity to move the needle for the company revenue-wise. It's not easy being a media company.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions