Twitter chops down Vine as social media platform goes into austerity mode

(Vine / Twitter) Vine's 6-second loop format attracted a sizeable audience. Image: Vine/Twitter

With a disappointing quarter in the rear-view mirror, Twitter is paring down its workforce by 350 people and cutting services. It is slicing away Vine, the six-second video service it launched three years ago, The Wall Street Journal reported. News of the shutdown was announced separately from the social media platform’s third-quarter earnings report.

Vine was initially popular with teens and young adults, who used the service both to post their own videos and to follow a bevy of savvy creators who regularly posted funny, super-short video clips to the service. But both the audience and its new crop of stars drifted away in past months – creators were clearly attracted to services like Facebook video, Instagram and Snapchat, feeling they received more support from these social media platforms, WSJ noted.

Advertisers found brand promotion difficult on the service – typically they had to work directly with Vine creators to get their product into a video, or make a Vine themselves. That contrasted with the ease of promoting posts on Twitter or Facebook.

Sponsored by Dell Technologies

Whitepaper: How to Elevate Your Content Delivery Workflows With Dell EMC PowerScale

Learn how Dell EMC PowerScale helps meet surging viewer demand while reducing costs with a single centralized platform for the ingest, processing, and delivery of the content your viewers love.

In May, more than 200 million people watched Vines, with more than 1.5 million Vine loops posted per day, according to Twitter, although the app’s popularity has waned since its heady days of being number-one on the App Store (it ranked at about number 284 recently, according to App Annie). The service has remained fairly popular even as many of its stars defected to other platforms, so Twitter’s announcement late Thursday set off a wave of lament from users.

Still, Vine isn’t the only social media platform-based video service that is struggling to find its footing. Snapchat and perhaps even Facebook Live are still experimenting with their respective formats, and Twitter itself hasn’t adequately monetized either its core service or its Periscope livestreaming service.

RELATEDTwitter’s NFL play may be shrewd or doomed to fail, depending on who you ask

The problem for Vine is that Twitter, beset with profitability issues, can’t invest more time or attention in the video service. “If Vine was housed inside a company that was growing at 30 percent a year … it would have survived,” L2 Inc. founder Scott Galloway told WSJ.

Twitter posted (PDF) more than $100 million in losses for the quarter, while its revenue growth year-over-year shrank to just 8.2 percent – compared to 50 percent revenue growth in the same period a year ago.

Perhaps even worse, potential buyers for Twitter, including Salesforce, suddenly backed off a few weeks ago, signaling a lack of confidence that acquisition would help turn around a ship plagued by profitability questions and issues with user security.

The company signaled that it would be making more than personnel cuts in its third-quarter letter to shareholders. “The restructuring allows us to continue to fully fund our highest priorities, while eliminating investment in non-core areas and driving greater efficiency,” said company executives.

Still, it’s not entirely terrible news for Twitter. With its investment in licensed live content just beginning, the company said that its live-streamed NFL Thursday Night Football games are gaining audience share. “…we’ve consistently seen the total audience grow on a week-over-week basis, with the most recent three #TNF games reaching more than 3 million viewers, up more than 28 percent from Twitter’s inaugural game with 2.35M viewers.”

Twitter brought in $616 million in revenues for the quarter, above its own estimates of $590 to $610 million, while its advertising revenue grew 6 percent year-over-year to $545 million overall – $487 million of that from Twitter O&Os (owned and operated properties).

Video has been Twitter’s top revenue-generating ad format for two consecutive quarters, with “very strong advertiser demand” for both video and livestreams and mid-roll ads during live events delivering at or above expectations. While brand advertisers are its biggest contributors, large international advertisers are the fastest-growing segment of that group.

Despite that, the outlook for Twitter overall is still murky. The company did not provide specific revenue guidance for either the fourth quarter or full year 2016, instead predicting EBITDA (earnings before interest, taxes, and deduction adjustments) of $700 to $715 million and a 27.5 percent to 28 percent GAAP margin. Twitter also promised to keep capital expenditures to no more than $360 million.

Read more on

Suggested Articles

Alan Wolk, co-founder and lead analyst at TV[R]EV, carries out a postmortem on Quibi.

AT&T is still suffering massive pay TV subscriber losses and HBO Max is still working through distribution woes.

Using its OTT Video Market Tracker tool, Parks Associates has found that the number of OTT services in the United States has reached nearly 300.