It’s been less than a year since Vizio became a publicly traded company, and one consequence of that is we know more about its business than ever before. The TV maker released its latest earnings report on Tuesday and revealed that over the last three months, its Platform Plus segment that includes advertising and viewer data had a gross profit of $57.3 million. That’s more than twice the amount of profit it made selling devices like TVs, which was $25.6 million, despite those device sales pulling in considerably more revenue.
Most of Vizio’s profit came from advertising
When Vizio filed to go public, it described the difference between the two divisions. While Devices is easy to understand — 4K TVs, soundbars, etc. — Platform Plus is a little more complicated. It counts money made from selling ad placements on its TV homescreens, deals for the buttons on remotes, ads that run on streaming channels, its cut from subscriptions, and viewer data that it tracks and sells as part of the InScape program.
The company says shipments of its TVs fell to 1.4 million in 2021 compared to 2.1 million in 2020, a drop of 36 percent. CEO William Wang told investors on the call that he sees “pretty healthy inventory” going into the holiday season, so anyone planning to pick up a value-priced TV or soundbar should have some decent options available.
That spike in Platform Plus revenue, which shot up 136 percent compared to last year, did a lot to help Vizio make up the difference as profits from TVs dipped compared to last year. Supply chain and logistics problems affecting many companies hit Vizio hard, too, but execs also said the company is working with its third-party partners to help find warehouse and trucking employees.
Where the numbers keep growing is in its number of active SmartCast accounts, which are now over 14 million, and how much money it makes from each user on average. That number has nearly doubled from last year, going from $10.44 to $19.89. On the call with investors and analysts, Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its WatchFree Plus package of streaming channels, a group that recently expanded with content targeting. The next biggest contributor is the money it makes selling Inscape data about what people are watching.
Vizio isn’t the only smart TV maker that’s really in the advertising business — as we noted a couple of years ago, while you probably know Roku for its TV OS and streaming boxes, CEO Anthony Wood is very up front about its true model. Roku’s most recent report revealed that on average it’s pulling in $40 per month on each user, or more than double what Vizio manages. One way Vizio plans to catch up is by building its own in-app payment system, which chief revenue officer Mike O’Donnell says will roll out to consumers next year.
A few years ago, Vizio got in trouble with the FTC for not properly informing customers before they became a part of the tracking program. It disabled the system on older TVs, paid a couple of million bucks to settle the fine, and moved forward with its new SmartCast tech that focuses on streaming and makes sure new owners get a warning about what they’re opting into.
If you have a Vizio TV and all of this is news to you, then you may want to check out the company’s privacy page for more information. It also will tell you how to disable the Automated Content Recognition (ACR) and data collection tech embedded in its TVs, which is available here. If you prefer to opt out on a SmartCast TV, simply follow these instructions:
Press the MENU button on your TV’s remote.
Select Reset & Admin.
Highlight Viewing Data.
Press RIGHT arrow to change setting to Off.