The best businesses to invest in are the ones that are hard at work solving big problems. I'll admit, it's been getting harder and harder lately for me to see the problem that Twitter $TWTR is working to solve. After watching a bit of Twitter's Thursday Night Football broadcast between the 49ers and the Cardinals the other night, I think I'm finally starting to get it.
If Facebook $FB solves the problem of connecting distant acquaintances then Twitter solves the problem of connecting people that are involved in a live moment together. That moment could be a sporting event, rock concert, an awards ceremony or something tragic or even revolutionary. In the words of CEO Jack Dorsey...Twitter is live...Twitter is real-time. Twitter will be more and more successful the more it can explore this idea of capturing live moments. I see progress manifesting itself in the form of more live content from places like Burning Man, SXSW, the US Open and Tour de France. Advertising will have to adapt to a platform like Twitter that provides a capability that has never existed before...the ability to plug into what is happening at this very moment.
If you've ever considered cord cutting like I have, the one thing that might be holding you back is the loss of live television. Binge watching can be fun but it can leave you feeling disconnected from what is going on right now. I think the next level for Twitter is to become the Netflix of live broadcasts. At that point there would be nothing to stop a cord cutter from getting the same experience from a combination of Netflix $NFLX and Twitter as they get from their current old fashioned cable company less the outrageous fees of course.
Lets take a look at some numbers. Disney's ESPN network is estimated to be worth $39B of Disney's total $149B market cap and currently charges more that $7 a month per subscriber. If Twitter could make a serious move into covering more "fringe-worthy" sporting events as well as other live events such as music festivals then Twitter's current $14B market cap may actually start to look cheap. Even though that is a big "IF" I think Twitter is currently the best positioned company to step into the role of streaming live events. It would integrate into a single platform a way for celebrities to promote and distribute their content while engaging their user base in real time. A platform like this could become a serious contender to Google's YouTube worth $87B and maybe even what Apple TV worth $3B was always meant to be.
My humble advice to Jack Dorsey would be to create something called "Twitter Now", charge something like $7.99 a month for it and start making some serious money for investors. If Google $GOOG, Apple $AAPL, Disney $DIS and Salesforce $CRM are not interested now they certainly should and soon will be.