What They Say
Vizio saw its revenues rise by 2% compared to Q2 last year to $408.9 million with around ¾ of the value coming from hardware. TV and sound bar numbers were flat with Q1 at 1.1 million units. . Executives said 16.1 million Vizio TV users are actively engaged with its SmartCast platform, up from 15.6 million the previous quarter and an increase of 15% compared to last year.
Vizio said its Platform Plus business, which includes SmartCast and Watch Free Plus, earned $110.8 million in revenue in the three months ending June 30, an increase of 69% compared to last year.
“Strategically, we’re willing to be at a low gross-profit margin on our TV unit ad sales, because they’re so valuable once we get those units in homes and generate recurring revenue streams that come from our ARPU (average revenue per user) model,” Townsend said. “To have a low margin at the onset of selling a unit, then to drive a high margin from our platform business, that strategy works incredibly well, and we’re now scaled up at a level where we want to lean into that approach.”
What We Think
Well, Vizio has never been anything but a low GP hardware seller, so a better quote might have been “After years of selling hardware at low margins, we’ve finally found a way to exploit the user base that we have created”! (BR)
