Shut out: Can Meerkat win the mobile live streaming war?

In March, techies (myself included: went wild over a new kind of live streaming. A startup called Meerkat launched a mobile app that let users broadcast high quality live video to the world straight from their phones, using Twitter to spread streams quickly over users’ established networks. Meerkat earned the kind of early buzz most startups would kill for, but analysts weren’t sure it would last.

Earlier that month, Twitter had acquired another live streaming app, called Periscope, that had not yet launched. Techies speculated: When Periscope launched its mobile app, a direct competitor to Meerkat, would Twitter allow both live streaming apps equal access to its social graph? Or would it wield its substantial platform power to shut off Meerkat’s access, removing one of that app’s most powerful channels to user growth?

When Periscope launched, Twitter did what Meerkat and its fans feared. It shut off the app’s access to Twitter’s social graph. Periscope launched as an app linked strongly to Twitter’s platform. Within a month, analysts saw user activity on Periscope grow while Meerkat’s leveled off.

Twitter’s move wounded Meerkat, but it didn’t kill it. Periscope boasted 10 million active users in August. In July, Meerkat claimed it had 2 million users.


Mobile live streaming operates with strong direct network effects, both for users who stream and user who watch. The greater the number of people who watch streams on an app, the higher the value for the broadcasting users, whose audiences are more likely to grow as a result. Similarly, the greater the number of people who broadcast on the app, the higher the value for people who watch streams, as they are more likely to find content they enjoy.

When Meerkat launched, a couple other live streaming apps were in the market, but Meerkat got all the buzz. Plentiful coverage in tech media and broad exposure at the influential South by Southwest Interactive Festival in Austin, Texas [], led its early user base to grow quickly, as people experimented with what was still a relatively new and interesting way to express themselves. As a result, network effects increased the value of using the app for all its users at a rapid clip.

Critical to the quick pace of Meerkat’s early growth, though, was the way users announced their live streams on Twitter. Meerkat knew that to get any value from live streaming at all, its brand new streamers would need to be connected quickly to an audience that would be likely to tune in. Or else, why would they stream at all?

To solve this, Meerkat piggybacked off Twitter. When a user started a stream, Meerkat accessed Twitter’s social graph to automatically send a tweet on the streamer’s account that linked directly to the ongoing stream. This allowed new streamers to easily find an audience. It also spread the concept of a Meerkat stream quickly through Twitter’s user base.

But that wasn’t all. When Meerkat viewers of a stream commented on a stream, their comments went out as tweets. When users “restreamed” a stream, they retweeted the tweet with the link to the stream. Meerkat founders went as far as to call this the first rule of Meerkat: “Everything that happens on Meerkat happens on Twitter.” In essence, Meerkat hijacked Twitter’s mature network in various ways to increase Meerkat’s value for its own users.

Meerkat’s reliance on Twitter’s API to deliver network value to its users was brilliant, but also risky. Twitter, not Meerkat, controlled third-party access to Twitter’s social graph. If Twitter shut it off, a big part of the fuel behind Meerkat’s network effects would slow. When Twitter launched Periscope, it shut off Meerkat’s access to its social graph, hampering the app’s growth mechanism and putting it at a distinct disadvantage against its only major competitor.


Neither Meerkat nor Periscope has taken any major steps to monetize its service. Both appear to be following the users-first model of capturing value in areas with strong network effects: Draw a large base of users to your app, and then figure out how you’ll make money from them.

Mobile live streaming, compared with other shared content platforms, presents particular challenges to accumulating a large user base, largely due to strong network effects. Because the apps distribute live video, rather than pre-recorded clips, the apps have to get lots and lots of people streaming before they can draw sufficient live content to satisfy a diverse and scattered user base.

Even 10 million active users on Periscope and 2 million on Meerkat, I would argue, have not been enough to satisfy prospective users, on either app. The live streams available at any given moment on Periscope and Meerkat are typically niche and rarely compelling. Similarly, the app’s social value is limited, as relatively few people in any one social network have made live streaming part of their routine, and apps like Snapchat are attracting more social engagement with its approach of giving real-time content a short shelf life, rather than requiring that content be live.


With the Twitter platform squarely on its side, Periscope has a distinct advantage over Meerkat in what appears to be Mission #1 for these mobile live streaming apps: Getting more people to pick up the mobile live streaming habit.

Since its turbo-charged Twitter link-up went cold, Meerkat’s growth has slowed considerably. But even Periscope, the market leader, is not exactly booming. To offer one reference point, consider Twitch, the live-streaming service for gamers. On that platform, popular broadcasts command tens of thousands or even hundreds of thousands of viewers all over the world, while top broadcasts on Periscope or Meerkat rarely draw 1,000 viewers. Until more people stream from their phones, the value for both streamers and viewers on both Periscope and Meerkat is going to remain relatively low.

Meerkat, then, has two options. Continue to try to grow its user base in Periscope’s shadow, or attempt to differentiate in such a way that makes the content it gathers more valuable to its target users. Again, Twitch provides an interesting case. Twitch was born as an offshoot of, a service that allowed users to live stream anything. Twitch targeted gamers specifically. That niche focus allowed Twitch to grow much faster than ever had, as it accumulated streamers and viewers who were more narrowly interested in gaming content.

Could Meerkat find a niche that moves it more quickly to a place where it can monetize its user base? Will it keep fighting Periscope for broad-base users? The mobile live streaming war is still young. The app’s best moves may still be ahead of it.


Apple Pay: Living up to the Hype?


GoPro – A Platform Worth $3 Billion

Student comments on Shut out: Can Meerkat win the mobile live streaming war?

  1. Great post and a great example of the perils of being dependent on a single platform. This isn’t the first time that Twitter has made their own version of a 3rd party product and cut off the original product after the launch. After Twitter created mobile apps that could upload photos, TwitPic no long served a purpose. And Twitter threatened to cut off access to the API. Ultimately TwitPic “reached an agreement” with Twitter and basically shut down.

    I wonder what Meerkat could have done to protect themselves? Perhaps try to multi-home and also post to Facebook as well?

  2. The difference between a winner takes all market, and a market in which two companies can exist, depends on the type of service being provided. In the case of Periscope vs. Meekrat, there is little differentiation between the two products. They provide the same service, to the same type of customer. Some might say that Uber and Lyft provide the same service to the same customer, but they co-exist. However, the main reasons that users multi-home between Uber and Lyft is either surge price or driver availability. In the case of Periscope / Meekrat, there are no limiting factors such as price or supply of drivers. Hence, there is no reason to switch from one service to the other, except for direct network effects. Users will pick one platform, and stay on it. Direct effects are the only reason keeping users on one platform versus the other, and that’s why in this battle there will only be one victor. The only way Meekrat can survive is if they serve a different niche customer that refuses to go to another service.

Leave a comment