The big question: will Twitter's NFL deal boost user numbers

Some analysts see it as potentially adding new MAUs, and others think it won't bring on new users

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Twitter made big headlines on Tuesday when it snagged a coveted deal to stream NFL games. Of course it's sharing those rights with the broadcast networks, and with the NFL's own cable channel, but it's still a big deal.

The big question now is whether or not streaming NFL games will do anything to boost Twitter's stagnating user numbers, which have been the company's biggest on-going problem for years at this point. On that issue, analysts seem to be split, with one firm thinking it may help at least a little, and another not having much confidence that the deal will attract new users to the site. 

On the somewhat positive side was SunTrust, which seemed a little trepidacious about the deal, but overall seems to the think the deal is a winner, mostly because it helps the company when it comes to branding itself as a place to go for live streaming events. 

Even though the deal with the NFL "may have a modest impact to revenues and is likely a loss leader, that it is more brand building for Twitter being 'Live,'" SunTrust's Bob Peck wrote.

 It may also help grow the company's userbase and “any acceleration to MAU growth and engagement is more important than any impact to near term profits, particularly if the MAU growth can be sustained.”

SunTrust kept a Buy rating on Twitter.

On the other hand, Pacific Crest wasn't convinced that the deal will be beneficial to the company's user numbers at all. 

“We don’t think casual Internet users, especially casual female users, which is what Twitter struggles with according to our surveys, will be attracted by the deal,” Evan Wilson, an analyst at Pacific Crest, wrote in a note.

His other big issue with the deal is that it isn't going to generate significant revenue for the company, since it will be simulcasting the games that air lived on NBC and CBS, who have paid hundreds of millions to broadcast them live. 

Out of the average 70ads that are aired on TV during NFL football game, roughly 50 of those ads will be exactly the same on the Twitter livestream. Only the other 15 to 20 are what Twitter will make its revenue from.

“We think it’s very unlikely this deal can be profitable. We’ve seen more and more examples of escalating sales and marketing costs deleveraging models in the chase for user growth,” Wilson wrote. “We’d put this move in that category, which we don’t expect the market to reward long term.”

Pacific Crest is keeping a Sector Weight rating on Twitter.

Twitter has to be hoping that Pacific Crest is wrong, as it needs to jumpstart its MAU numbers somehow. 

In the most recently quarterly earnings, Twitter revealed that its numbers were either flat, or even down, quarter-to-quarter, depending on how you look at it. 

Twitter saw its average monthly active users (MAUs) grow a mere 9 percent year-to-year to 320 million, but stay completely flat from Q3.

Excluding SMS Fast Followers, MAUs were only 305 million for Q4, up only 6 percent year-over-year, but they were actually down on a sequential basis from 307 million in the third quarter. The company is already stressing that, as of the end of January, it had already seen total MAUs, excluding SMS Fast Followers, return to Q3 levels.

Twitter's sock rose 1.29 percent on Wednesday, to $17.27 a share. 

(Image source: sportschump.net)