Today, Walmart has declared its acquisition of Vizio for a substantial $2.3 billion in cash, a strategic move aimed at bolstering its competition against Amazon and expanding its burgeoning advertising business.
Vizio seamlessly integrates into Walmart’s portfolio, standing out as the largest television brand retailed by the giant. However, the significance of this deal transcends the televisions themselves, focusing more on the potential for advertising opportunities. With smart TV operating systems becoming key sources of customer viewing data and advertising spaces, including those from its WatchFree+ free, ad-supported streaming service, Walmart is poised to tap into a new revenue stream beyond its conventional sales of goods both in-store and online.
Seth Dallaire, Executive Vice President and Chief Revenue Officer of Walmart U.S., expressed enthusiasm about the acquisition, stating, “There is a lot to be excited about with this acquisition. We believe VIZIO’s customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling. Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”
William Wang, CEO of VIZIO, shared his perspective, stating, “We believe this is the ideal next chapter in VIZIO’s history. By bringing our capabilities and resources together, we’ll drive innovation and create even more value for our customers. Walmart’s approach is aligned with VIZIO’s mission and vision, and our technology will help bring a scaled, connected TV advertising platform to Walmart Connect. This transaction delivers immediate and compelling value to VIZIO stockholders and is a true testament to the hard work of the entire VIZIO team.”
In the race to dominate the household’s biggest screen, Roku currently holds the lead with the largest share of smart TV operating systems. However, Amazon, Walmart’s retail rival, also commands a substantial presence through its Fire TV devices. With this acquisition, Walmart positions itself to compete more effectively with Amazon Prime as it seeks to expand its Walmart+ membership program.
Beyond the immediate competition, advertising could prove to be a higher-margin business for Walmart compared to its traditional offerings of goods and groceries in brick-and-mortar stores.
Vizio, originating as a budget-friendly television brand, has evolved over time, enhancing the quality of its products and emerging as one of the more successful players in the segment. Presently, Vizio offers a diverse range of models, spanning from high-end TVs to more budget-friendly options.
While Walmart already markets its own televisions under the Onn brand, these devices run on Google and Roku’s TV operating systems. It is important to note that this acquisition is contingent upon regulatory approval before it can be finalized.