Big news: Two-thirds of Vizio’s gross profit came from advertising in the third quarter.

Flashback: What Is the Vizion for Vizio’s IPO?

Vizio gross profit breakdown (% of total):
1) Platform+ – $57M (69%)
2) Hardware – $26M (31%)
3) Total – $83M

Vizio share of gross profit from platform+ (mostly advertising):
1) 2020-Q3 – 34%
2) 2021-Q3 – 69%

Why this matters: Video advertising is already more lucrative than hardware sales, and that trend should continue as targeting and measurement improves.

Quote from ad tech source:
“If you look at the business of making TVs, there isn’t a lot of margin — that’s the reality and it’s been that way forever.  Samsung blazed that trail and Roku’s been doing that for awhile, and Vizio and LG are next in line.”

Vizio Platform+ revenue (YoY growth):
1) 2020-Q3 – $37M
2) 2021-Q3 – $86M (↑ 134%)

Vizio profit margin by product type:
1) Platform + – 67%
2) Hardware – 5%

Vizio Smartcast (AVOD) accounts (YoY growth):
1) 2020-Q3 – 10.3M
2) 2021-Q3 – 14.4M (↑ 35%)

Vizio Smartcast hours (YoY growth):
1) 2020-Q3 – 3.1B
2) 2021-Q3 – 3.6B (↑ 16%)

Vizio Smartcast monthly revenue per account (YoY growth):
1) 2020-Q3 – $1.14
2) 2021-Q3 – $1.99 (↑ 74%)

Vizio Smartcast revenue per hour (YoY growth):
1) 2020-Q3 – ≈ $0.012
2) 2021-Q3 – ≈ $0.024 (↑ 101%)

Big question #1: How does Vizio make money with Smartcast?

Quick answer: ≈ 77% comes from advertising.

Big question #2: How does the revenue per account compare to Roku?

Monthly revenue per account in 2021-Q3:
1) Roku – $3.44
2) Vizio – $1.99

Bottom line: This streaming video business is in the early innings, and yet Vizio already generates close to half of the ad revenue per hour ($0.024 vs. $0.050) of linear TV.