Vizio's gross profit from ads, subscriptions and data collection is now more than double its profit from selling actual TV screens, according to the company's earnings report as noted by The Verge.
Vizio's ad business
In the company's latest earnings report, it was revealed that Vizio's Platform+ segment which includes data collection and advertising had a gross profit of $57.3 million which is more than double compared to the $25.6 million profit it made selling TVs.
Part of the reason is that shipments of new TVs fell from 2.1 million in the third quarter of 2020 to 1.4 million in third quarter of 2021 while Vizio's Platform+ segment saw significant growth (+134% revenue, +88% profit).
- "I’m proud of the strength of our Third Quarter results, as the investments we’ve made in our Platform+ business continue to bear fruit," said William Wang, CEO of Vizio. "Our dual revenue model is a competitive advantage, and it allows us to leverage our Device business to drive rapidly growing, high-margin revenue within our Platform+ business. Because Vizio delivers the entire entertainment experience – from the hardware and software, to the content and ads – we are able to deliver an attractive value proposition to consumers, advertisers, and content partners alike. We are here to define the future of the Smart TV business."
Ads on your remote control
Vizio collects money from selling ad placements on your TV's homescreen, from letting streaming companies put sponsored buttons on your remote control, and from running ads on streaming channels. It also takes a cut from some streaming subscriptions.
In addition, Vizio collects viewer data through its InScape program. How? One way is to scan everything you are watching on-screen through ACR (Automated Content Recognition).
Also read: Vizio 2022 TV line-up
Of course, Vizio is not the only TV manufacturer or platform maker to monetize users. Roku has openly said that it wants to turns Roku OS into a "next-generation ad platform" while Google has rolled out autoplaying, 'cinematic' ads on Android TV. Google and Roku's devices are inexpensive but TV sets can cost a lot more. LG recently launched an alternative TV OS built on ads and Samsung is putting increasingly obtrusive ads on the Tizen Smart TV homescreen.
Vizio said that it has 14.4 million active SmartCast TV accounts. On average it made almost $20 per user in the quarter, up from $10.44 in the same quarter last year.
How to turn off ACR on Vizio SmartCast TVs
| 1. Press the MENU button on your TV's remote
2. Select System
3. Select Reset & Admin
4. Highlight Viewing Data
5. Press RIGHT arrow to change setting to Off |
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