Published , by Chris Jarrard
Published , by Chris Jarrard
The story of Vizio began nearly twenty years ago when the upstart company began offering flat-panel televisions to consumers at prices well below that of other established electronics brands. Entering 2021, Vizio is now one of the largest television suppliers in North America and is preparing to go public via IPO. While its retail sales remain strong, growth potential is murky. Vizio will attempt to convince potential investors that its future is in revenue from media streaming.
The company made waves in the mid-2000s with its affordable television sets that enjoyed massive success at retail as the public upgraded to flat panels from older CRT-based televisions. Vizio continued to grow in the following years as the industry was successful in convincing the public to upgrade to 4K flat panels from older generations of HDTVs. While 8K sets are on the horizon, selling regular customers on another big upgrade is unlikely.
Ahead of its push to become a publicly-traded company, Vizio is pointing investors toward its projected revenue for ad sales via its integrated smart TV software platform SmartCast. Vizio loads SmartCast onto all of its new models and it allows customers to access a variety of the most popular services such as Netflix or Disney+. Vizio gets a small cut from the major streaming providers every time a customer signs up for one of the services through the SmartCast platform.
Online media streaming is a monster business that still has lots of room for growth, especially as more households cut the cord from traditional providers offering cable or satellite services. Vizio also sells ad space on the SmartCast home screen. With millions of potential viewers loading up SmartCast to access Netflix or Hulu, the potential for ad impressions is massive.
Vizio is betting its future on ad sales. While television retail sales can keep them afloat, their strategy of undercutting rivals such as Samsung and Sony leaves less room for profit margin. Last year, Vizio offered its first series of OLED televisions. The panels used were acquired from rival LG, leaving little room for profit once Vizio priced the sets under what LG offers them for. On the whole, TV prices are down across the board. A decade ago, 65-inch models were seen as extravagant purchases. Now such televisions can be acquired for less than $500 during sales.
Vizio is betting its future on media streaming. How it performs on Wall Street will be a strong indicator of how the finance sector feels about the company’s ad sales ambitions.