Walmart wants to expand into the smart TV business and plans to do so by acquiring Vizio, one of the most popular TV makers. In a press release today, Walmart says it will buy Vizio for cash at $2.3 billion. The deal is still subject to the normal government regulatory approvals before it can officially close.
Walmart, which has sold Vizio TVs in its retail stores for a long time, stated it wants to serve its customers with new and innovative TV and home entertainment systems with its Vizio purchase. However, the real money-making plan is to get advertising revenue via the SmartCast operating system that's inside those Vizio TVs. The combination of SmartCast with Walmart Connect media business will "redefine the intersection of retail and entertainment."
The SmartCast OS launched in 2018 on Vizio TVs and has so far signed up 18 million active account users. The OS is used to show ads while people watch free TV content. Vizio says that its Platform+ division, which includes the SmartCast ads group, currently generates most of its profit. It's easy to see why Walmart would want that kind of money.
Walmart is likely hoping that people looking for affordable new smart TVs will buy Vizio models at their stores. According to Barron's, the company currently has 15 percent of the total TV market in the US. Vizio is also the only maker of affordable TVs that supports and controls its own operating system. Samsung and LG also do the same, but their TVs are more expensive.
Because Vizio does have SmartCast, it doesn't have to share advertising from the OS like other companies. Businesses like TCL, Hisense, and others use Amazon Fire TV, Roku, and Google TV for their operating systems, but Vizio can run ads and make money every time someone watches a free movie or TV show on Pluto TV, Tubi, Amazon Freevee and more.
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