Since going public earlier this year, Vizio has operated in two distinct segments: Platform Plus and Devices. Platform Plus encompasses the advertising and user data business of Vizios, while Devices encompasses the sale of Vizios hardware. It turns out that Platform Plus is responsible for more revenue from Vizios than its Devices segment; Platform Plus made gross profit of $ 57.3 million in the past three months, while Devices made $ 25.6 million.
Indeed, Vizio uses its televisions to access its real money generators: advertising and viewer data. Vizio sells many of its TVs at cost (or almost), which may at first seem like bad practice, but in reality, it allows Vizio to start following whatever new owners of these TVs watch. Vizio can then sell that data, likely to anyone interested in the entertainment options that have the most viewers. This is why smart TVs are somehow more affordable than stupid TVssmart TVs can come with a lot more features, but they also give manufacturers ways to track who is viewing the data, and sometimes their location. In a way, the end users of Vizios TVs are real Vizios products.
Banner ads, like this one for The Bad Batch, are just one way for Vizio to make money from advertising. (Photo: Vizio)
The Southern California-based company also earns a significant chunk of its money advertising shows, movies, and streaming services to users. If you have a smart TV, take a look at your remote: if it has a Netflix button, for example, that button is the product of negotiations between the maker of the TV and Netflix to the tune of real money. Home screen ads and banner ads (like the ones you see when looking for something to watch) are also great opportunities for Vizio to make money from streaming services.
Vizio isn’t the only computer hardware company that not so secretly generates a significant portion of its profits from viewer data. Roku too tracks viewer data to more effectively negotiate advertising deals that earn the hardware company a pretty dime. But while the Vizios earnings report brags about being the # 2 TV brand and # 1 soundbar brand in the US, make no mistake, the company might as well be considered an advertising agency.
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