Periscope was a live streaming video app developed by Joe Bernstein and Kayvon Beykpour in 2013 acquired by Twitter in 2015 before it was launched to the public and was steadily absorbed thereafter. The official reason for Periscope to be discontinued was the cost for Twitter of maintaining it as a standalone app. Therefore, the failure of Twitter to maintain Periscope and to enhance its monetization determined its failure.
Background
Periscope was a live streaming video app developed by Joe Bernstein and Kayvon Beykpour in 2013. Beykpour became inspired to develop the app after reading about protests in Istanbul on Twitter without being able to see what was transpiring.
Before the app was even launched, it was purchased by Twitter in 2015 to address the rapid growth of competitors offering Meerkat. Periscope was an immediate success, surpassing 10 million accounts four months after release. Twitter also noted that users were watching the equivalent of 40 years of content on the platform each day.
December 2016 marked a pivotal point for Periscope as some of its features began to be integrated into the main Twitter app. Four years later, Twitter announced it would be discontinuing Periscope effective as of March 2021.
Let’s take a look at why Periscope met its end after just six years.
Rising maintenance costs
In a statement detailing the March 2021 shutdown, Twitter noted that the core Periscope app was “in an unsustainable maintenance-mode state, and has been for a while. Over the past couple of years, we’ve seen declining usage and know that the cost to support the app will only continue to go up over time.”
Maintenance costs were also high because Twitter had to maintain two separate apps with an overlap in functionality. As the user base for Periscope decreased, there was not a similar and appreciable decrease in operational costs.
Twitter integration
Related to high maintenance cost was the way in which Periscope was steadily absorbed into the main Twitter app.
Integration started as early as 2016, with Twitter incorporating the Periscope Live Broadcast feature into its mobile app. That same year, Twitter made a deal with the NFL to stream Thursday Night Football games while relegating Periscope to streaming behind-the-scenes content only.
Effectively, the Twitter platform became as functional as Periscope but with a much bigger audience.
Squad acquisition
Some argue the demise of Periscope was influenced by Squad – a video and audio chat service acquired by Twitter in December 2020.
The acquisition of Squad was less important than what Twitter planned to do with it. A company announcement regarding the acquisition stated that the Squad app was being retired with more immediacy and its video features absorbed by Twitter.
That the similar acquisition of Periscope took so long was largely due to COVID-19 and other projects taking priority in 2020. But it did highlight Twitter’s preference to acquire companies and absorb their features into its platform completely.
Key takeaways:
Periscope was a live streaming video app developed by Joe Bernstein and Kayvon Beykpour in 2013. The app was acquired by Twitter in 2015 before it was launched to the public and was steadily absorbed thereafter.
For Twitter, the cost of maintaining Periscope as a standalone app became too high. What’s more, a decrease in the Periscope user base did not mean the app was cheaper to operate.
Twitter’s acquisition of video service Squad had little impact on the demise of Periscope. But in a broader sense, the Squad acquisition was representative of Twitter acquiring other companies to increase functionality.
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RadioShack is an American electronics retailer founded by brothers Milton and Theodore Deutschmann in 1921. The company enjoyed market dominance in the 70s and 80s but faded fast after a slew of missed opportunities.
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Compaq’s short-sighted acquisition of DEC provided the catalyst for its decline. While the company was dealing with the ramifications of the acquisition, competitors such as Dell and Gateway increased their market share.
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Kodak was also the victim of the changing retail landscape and consumer sentiment toward foreign products in the United States. Blind in its devotion to printing, it also missed an opportunity to create a Facebook-style photo-sharing website three years before Facebook itself was conceived.
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Friendster’s decision to raise funds via venture capital funding populated its board with investors who were not interested in technology or innovation. The company was acquired by MOL Global in 2009 who then sold its patents to Facebook soon after.
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Yahoo acquired AltaVista in 2003 and absorbed the technology behind the search engine into its own platform. AltaVista was formally put to rest ten years later.
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Napster quickly attracted the attention of music artists, with Metallica instigating court proceedings against the company for copyright infringement and the distribution of unreleased music.
Napster was forced to shut down after the Recording Industry Association of America won a court injunction. Mounting legal fees and compensation costs led to the company filing for bankruptcy in 2002.
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Though profitable to some extent, BlackBerry’s focus on enterprise customers came at the expense of the far more lucrative consumer market. Government opposition to censoring information also eroded one of the core strengths of the company’s smartphone.
Nokia is a Finnish telecommunications, consumer technology, and information technology company founded in 1865. It enjoyed 51% of the global market share for mobile phones in 1998.
Nokia’s device-based hardware system was cumbersome and outdated, but the company persisted with it while competitors developed the software-based iOS and Android operating systems. By the time Nokia phones offered Android, the company had been left behind.
Corporate mismanagement within Nokia was rife and culture suffered as a result. Internally and externally, the company failed to acknowledge its diminishing relevance and market share.
Xerox is an American corporation selling print and digital document products and services worldwide. The company failed to capitalize on revolutionary research performed at its PARC R&D center.
Xerox was visited by Steve Jobs in 1979 who gained access to PARC in exchange for Xerox receiving shares in Apple. He then purchased the rights to a Xerox GUI and used it to produce the Apple Macintosh.
Xerox released the Xerox Star personal computer in 1981 in a rare example of the company selling an innovative product commercially. However, the Star was prohibitively expensive, targeted the wrong market, and was a decade ahead of its time.
Quibi was an American short-form streaming service for smartphones. Unfortunate timing with the onset of the COVID-19 pandemic is at least partly responsible for the failure of the platform.
Despite billions being invested in securing high-end talent and production studios, Quibi content was generally poor quality. In any case, there was no way for consumers to share or engage with the content they did enjoy.
Quibi was not helped by its pricingstrategy and the presence of established competitors offering more for less. It was also improperly and inadequately marketed.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
