If you think that most of its earnings from Vizio come from selling its TV hardware, you're wrong. The US manufacturer greatly benefits from an advertising system that encompasses personalized ads, analytics of viewer data and bobbins dedicated to certain streaming platforms.
The company has been in the market for several years, but its recent IPO allows us to know internal details that were not previously public knowledge And, precisely, its latest quarterly earnings report reveals that its Platform + segment reported a profit gross of $ 57.3 million . This is more than double the 25.6 million device division.
This business model is very lucrative for Vizio. As described by the company itself, its division Devices includes its televisions and sound bars. Platform +, for its part, includes personalized advertisements on the home screens of its TVs, advertisements for free streaming channels and agreements with streaming platforms to add dedicated buttons on the remote control.
Vizio's advertising business
In addition, Platform + encompasses the analysis and sale of viewer data. This means that, if you have a Vizio television, the company collects your activity and compares it with that of other users to generate trends and other reports and thus identify what people are watching. This data is sold through its InScape program.
Vizio's advertising system has been a kind of lifeline for the company, which has seen TV sales drop 36% compared to last year. SmartCast, one of the services it offers, has 14 million active users. This represents a revenue per user of $ 19.89 from advertising, which constitutes 77 percent of the company's revenue.
Vizio isn't the only manufacturer to profit from the ad business. Roku, the company that offers streaming devices for screens and televisions, receives, on average, about $ 40 per month for each user. This is more than double what Vizio receives with its system. A common point, on both Vizio TVs and Roku devices, is their adjusted price. And precisely one of the cons is the addition of ads and data tracking.
