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Reddit Partners with Major Sports Leagues to Boost Video Content and Advertising Revenue
Reddit Inc. has announced new partnerships with several major sports leagues, aiming to enhance its video content and increase advertising revenue. In deals disclosed on Monday, the San Francisco-based social media platform has teamed up with the NFL, NBA, MLB, PGA Tour, and NASCAR. These collaborations are set to deliver a broader array of sports-related video content to Reddit, including game highlights, behind-the-scenes footage, Q&A sessions with athletes, and exclusive clips from significant events such as the Super Bowl and NBA All-Star game.
A New Home for Sports Fans
Reddit’s Chief Operating Officer highlighted the platform’s role as a prime destination for sports enthusiasts worldwide. She emphasized that Reddit allows fans to engage deeply with sports content and connect with fellow fans year-round, beyond the confines of any single sports season. The platform reports hosting over 1,000 sports communities, generating a staggering 249 million interactions monthly among fans.
Impact on Reddit's Stock and Advertising Revenue
Reddit’s share price saw a 6.5% boost to $68.90 following the announcement, adding to a 90% increase in its stock value earlier in the year. Financial specifics of the partnerships have not been released, however, the influx of high-quality video content is expected to attract more advertisers, particularly those interested in video placements. Reddit initially experimented with video ads during the NFL's 2023-2024 season, successfully attracting brands like FanDuel, Samsung, and Ford to advertise alongside premium sports videos.
Ad Business Evolution
Over recent years, Reddit has significantly invested in expanding its advertising capabilities, culminating in its IPO this March after nearly two decades as a private entity. The company is also looking to diversify its advertising options by introducing more video and shopping ads. A notable 98% of Reddit’s $804 million revenue in the past year came from advertising, largely through traditional text-based and feed ads within interest communities.
Challenges and Comparisons
The pivot towards video advertising represents a significant shift for Reddit, which has historically been a text-centric platform. This move positions Reddit to better compete with rivals like X (formerly Twitter), which ventured into video advertising as early as 2016 and grew it into a $1 billion business. Analysts predict that Reddit could similarly achieve over $1 billion in revenue from video ads, given its expanding user engagement and content diversification.
