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State of the Screens

Vizio’s Top Selling Product? Ads

By December 2, 2021February 3rd, 2022No Comments

2021-12-01_10-48-17

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.

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.