Twitter is entering broadcast TV sports with its licensing of ten Thursday night games in the upcoming season. Online video, of the sort that Twitter will stream, fetches an ad rate of approximately $24 CPM (per thousand impressions). The TV networks that are broadcasting the same game are capturing $43 per thousand impressions.TV ad rates are set by a byzantine (in terms of digital technology) system that features around 10,000 Americans logging TV viewing activities via Nielsen. Digital advertising rates are sold against a modern version of the same - what the industry calls impressions.Source: RapidTVNewsTwitter is rumored to have paid $10 million for limited streaming rights to 10 NFL games in the 2016/17 season - $1 million per game.Live Stream = Big LossesSome Regional Sports Networks (RSNs) average only 167,000 TV viewers with an average viewing time of 6 minutes. This is at the low end of TV viewership numberss, but it’s typical for an RSN in a major market. Viewership numbers can dip lower— for example a Dodger’s 2015 game drew 103,871 viewers.Twitter’s average video length is currently much shorter than 6 minutes, but let’s assume average viewing length goes up with NFL deal. Using a 167,000 baseline viewership number and current online video ad rates, Twitter loses $996,000 with every game they broadcast.In the United States, CBS says they streamed the 2016 Super Bowl to 4 million US viewers. If Twitter streamed each of the 10 games to 4 million viewers they would net $968,000 at a $24 CPM rate and just over $1.7m at the TV CPM rate of $43. They would lose from $800,000 to $900,000 per game.Of course, Twitter received global streaming rights which gives them a much larger footprint than an RSN. The NFL has 17.5 Twitter followers and is growing faster than NBA, MLB and Real Madrid, other leading sports brands, on Twitter.But even if 20 million international viewers streamed each of the 10 games on Twitter, the company would still lose over $500,000 per game.For a live streaming broadcast it’s actually worse for Twitter as the rights they’ve purchased are limited. CBS, NBC and NFL TV also have broadcast and streaming rights. CBS and NBC are actually selling ads that Twitter will display in its stream. Twitter will be left with only a segment of ad revenue that remains after NBC and CBS ad sales team is done.If we focus solely on the ad revenue from streaming the 3 hour broadcast, there seems to be no pathway to profits for Twitter. They would be better off buying live streaming rights to junior water polo matches.Great Return on Investment PossibleHow is Twitter going to make a profit on its $10 million investment in Thursday Night Football? They are unlikely to get 4 million viewers per game so they can only focus on driving up the CPM rate or avoid pricing via CPM at all. Unlike Verizon, Twitter can’t sell more phones or data to drive revenues.To break even and earn $1 million plus in ad revenue per game, Twitter will have to convince advertisers that 1. The number of people who are engaged with the game is very high, 2. that the types of people engaged are a great target, and 3. the level of engagement is deep. Here is a 3-part plan on how they might do that:ContentWith ad-supported content like behind-the-scenes, replays, in-depth stories, and other forms of short-form video and text content Twitter can reach tens of millions each day during the season. Athletes producing live video will generate tens of millions of impressions.Stats and GamificationDeep engagement with viewers is something advertisers will pay more for. Fans engaging with content like stats, polling and trivia is cheaper to produce than other forms of content, is as engaging, and can be integrated into the Twitter broadcast.Dominate In-Game ExperienceTwitter can combine content, statistics, gamification and the live broadcast in brand new ways to fully dominate a viewer’s attention for (whether they are watching on Twitter or on TV) allowing advertisers a much richer experience with consumers. (They just need to figure out the interface.)If Twitter dominates in-game experience for all viewers, provides additional enhanced content, statistics and gamification they can reach 10 million people per day to earn as many as 100 million daily impressions. If this happens, Twitter will be able to profit from its investment multiple times over.It’s a big “if” though and relies on Twitter successfully doing things (creating content) they’ve never done before. But it they want to see a profit, it’s the only way there.