What Happened To Periscope? Why Did It Fail?

Executive Summary:

Periscope is a social network that allows users to broadcast and consume live-streamed video content.

On March 31st, 2021, Periscope was shut down because the cost of maintaining and expanding the platform was outweighing the revenue that it was generating.

What Is Periscope?

Periscope is a social network that allows users to broadcast and consume live-streamed video content.

The only requirements to be able to post video content is a working internet connection and to create an account using one’s email, social handles (namely Facebook and Twitter), or phone number.

Once logged in, users would be shown various live streaming options from which they could then choose from.

Discoverability is aided by allowing users to find live streamers in proximity vis-à-vis its interactive map feature.

Users can, furthermore, interact with streamers by posting comments in the chat. On top of that, they can support them through hearts.

The video content itself can be replayed for up to 24 hours after the initial broadcast. Creators themselves can also download the content into their camera roll.

Most of the live broadcasts on Periscope were recorded through a mobile phone. However, video content could also be created on selected devices from GoPro and DJI.

Periscope itself could be accessed by visiting the platform’s website or by downloading its mobile apps (available on Android and iOS devices).

The app was ultimately shut down in March 2021. How it came to be, its highs and lows, as well as the reason for its failure will be covered in the next few chapters.

What Happened To Periscope?

Periscope, formerly headquartered in San Francisco, California, was founded in 2014 by Kayvon Beykpour and Joseph Bernstein.

Both founders, who are childhood friends, had previously sold their startup, dubbed Terriblyclever, to EdTech company Blackboard in 2009 for an undisclosed amount.

They stayed on at Blackboard for another four years and led the mobile division that formed right after they were acquired.

Somewhere in 2013, Beykpour decided to leave and take a break to travel full-time. He eventually got to Istanbul where he witnessed the Gezi government protests right from his hotel window in the city’s Taksim Square.

People were filming those protests with their phone cameras and later uploading the content on social networks like Facebook.

This got Beykpour thinking: what if there was a way to live stream oneself from these types of events while they’re occurring?

He got in touch with his friend and former co-founder Bernstein, telling him that it “should be possible to use your phone to give you a visual periscope into the world.”

That conversation eventually led them to commence work on what would become Periscope. In April 2014, they raised a $1.5 million seed round from Founder Collective, Scott Belsky, Maveron, Google Ventures to fund the product creation.

The funding also allowed them to hire a few engineers and move into their first office in the costly San Francisco.

Throughout the following months, they continued to plug away. Sometime in November, Beykpour was having coffee with Jessica Verrilli, a friend who at the time was working as Twitter’s Director of Corporate Development.

During the conversation, he would frequently mention his startup to which she replied whether she could introduce him to some people at Twitter. Those people ended up being Dick Costolo, Twitter’s former CEO, and Jack Dorsey, its eccentric co-founder.

Two years prior, Twitter had purchased the hit video platform Vine, which eventually grew to over one hundred million users by August 2014. Dorsey had even used it to upload videos of protests in Ferguson.

Twitter’s vision was to ultimately expand its platform from short-form textual tweets to video-based content. One thing led to another and the two sides would soon discuss a purchase. In January 2015, these talks finally commenced.

Two months later, in March, the news finally broke that Twitter had acquired Periscope. Reports put the acquisition price between $50 million to $100 million, with most of the compensation being issued in Twitter stock.

However, even before launching Periscope was already facing stiff competition from an unlikely rival. Dubbed Meerkat, the live streaming app became the talk of the town during the South by Southwest Interactive (SXSW) festival.

Meerkat was using Twitter’s social graph to distribute its video live streams, which allowed it to attract more than one million users within weeks of launching. Days before Periscope’s iOS app was released to the public, Twitter decided to cut off Meerkat’s access to its social graph, which forced the burgeoning social network to build its own community.

On top of that, Twitter began to contact dozens of celebrities to convince them that Meerkat was dying and its users moving to Periscope. It was even tapping influencers from Vine, its other popular video app.

By mid-April, Meerkat’s download number began to stagnate while Periscope flourished. Periscope crossed one million downloads just two weeks later. Meerkat eventually fizzled out and was discontinued in early 2016. However, out of it grew the video conferencing app Houseparty, which Epic acquired in 2019 (but ultimately discontinued in October 2021).

In the meantime, Periscope had to grapple with its own unique problems. For example, users would use the platform to live stream copyrighted events such as the Mayweather-Pacquiao fight in early May 2015. Periscope responded by upping its content moderation efforts to swiftly take down any form of illegal content.

On May 26th, the team was finally able to release the Android version of its app. It also added a variety of helpful features, including a map view to find streamers in proximity as well as video replays for the web.

All of these initiatives enabled the platform to grow to more than 10 million active accounts by the middle of August. Its success would also invite much bigger competitors though. Just as the company crossed the 10-million-mark, Facebook announced the launch of its own live broadcasting feature. Instagram introduced one not long after.

Despite the heightened competition, more and more outlets and businesses were starting to embrace Periscope. In September, the White House created a Periscope account to live broadcast Pope Francis’ trip to the United States.

Periscope’s ever-increasing importance also led Twitter to fully integrate it into its own platform. In January 2016, Twitter enabled Periscope creators to launch live streams right within its own platform, which allowed them to take advantage of Twitter’s social graph (and thus their following on the platform). Days later, Periscope also announced an integration with GoPro and its HERO4 cameras.

Over the coming months, Periscope’s team continued to churn out new features on a regular basis, including the ability to draw sketches, allowing creators to save their own broadcasts, an integration with DJI drones, or real-time comment moderation.

Interestingly enough, Periscope was also increasingly used for political purposes. In June, Democrats broadcasted their protests on lackluster gun-control legislation. A month later, Deray Mckesson, an advocate for the Black Lives Matter movement, was taken into custody while filming protests on Periscope.

Its increasing relevance also began to attract more sophisticated partners like Disney, Louis Vuitton, or ABC’s Dancing with the Stars who all took advantage of Periscope’s new Producer feature. It enabled them to create a specific link that they can then stream to from a variety of devices, including professional cameras, studio editing rigs, or satellite trucks, amongst others.

However, by the end of 2016, Periscope’s user metrics began to slip. Its app had steadily dropped, all the way from number 23 at the beginning of the year down to 441 by the end of the year. Twitter tried to revive its growth by adding Periscope videos to its previously launched ‘Explore’ section, which would feature live videos sourced from Periscope within its ‘Top Trends’.

Throughout 2017, Twitter also finally began to monetize Periscope. In late March, it added pre-roll video ads on both live and archived videos. Then, three months later, it launched Super Hearts, in-app purchases of virtual goods that viewers buy for real cash and can send to creators for added attention. The Super Hearts were inspired by platforms like Twitch, one of the major ways in which its creators make money.

Unfortunately, the launch of the tipping feature came with its own set of problems. Broadcasters found out that if they removed the replay of one of their live streams before cashing out their tips, they’d lose any tips they gathered during the stream. Periscope, to its credit, implemented a quick fix.

Periscope also continued to double down on its creators by upping their revenue share later in November. A month later, it expanded the tipping feature beyond the United States by adding support for Canada, Ireland, and the U.K. (with other countries added soon after).

Due to major reorganization efforts at its parent company Twitter, Periscope soon found itself without a dedicated CEO. In June 2018, Kayvon Beykpour was promoted to Twitter’s Head of Consumer Product, a role in which he oversaw a variety of other products apart from Periscope.

The change in leadership became evident when looking at the velocity at which the Periscope team was able to churn out new features. While in the previous years, the team had released dozens of new features in a year, it now only released a major few.

In September, for example, Periscope added an audio-only feature to take advantage of the burgeoning podcasting industry. Ironically enough, this was essentially a predecessor to Clubhouse, which Twitter later tried to purchase.

Throughout 2018 and 2019, it added a few more features, such as the ability for a broadcaster to assign their own chat moderators or to invite guests onto a live recording. Even with increased online activity due to coronavirus lockdowns, Periscope was only a shadow of its former self.

On December 15th, 2020, Twitter finally announced that it would wind down the service by March 2021 (but continue to offer live video streaming through its integrated Twitter Live feature).

Interestingly enough, the platform received one last blow: in January 2021, Turkey’s Information and Communication Technologies Authority imposed an advertising ban on platforms like Periscope as well as Twitter and Pinterest.

By that time, though, Periscope had already stopped people from signing up to the platform. Periscope was ultimately shut down on March 31st, 2021, six years after it was first unveiled to the public. Users can still visit Periscope’s website and log into their accounts to access their previous broadcasts.

Why Did Periscope Fail?

Periscope was shut down because the cost of maintaining and expanding the platform was outweighing the revenue that it was generating.

For once, video live streaming did not end up becoming as significant of a market as Twitter’s executives had hoped for when they made the acquisition.

Periscope had to then compete in a competitive market against platforms with established user bases such as Facebook, Instagram, or YouTube.

On top of that, Twitter, back in 2016, was essentially cannibalizing Periscope by introducing the ability to go live on Twitter itself.

In the end, it was competing against itself. While revenue shrank as a result of the competition, its cost base for maintaining both apps remained consistent.  

Lastly, Twitter shifted its strategy towards live audio content with the launch of Twitter Spaces (as previously mentioned, it also tried to acquire Clubhouse) and the acquisition of Squad, a screen-sharing and video conferencing app, in December 2020.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.