What Display Daily thinks: Vizio saw a 4% drop in net revenues and an 11% drop in smart TV sales, but managed to show some success in monetizing its user base because while it didn’t sell as many TVs, it generated more revenues from the users that it already has.
That creates two possible scenarios: the first is that the company acquires users from TV sales and if the company is not selling as many TVs then, logically, it should impact SmartCast revenues. Secondly, you can flip that argument and say that the TV sales environment is challenging and, yet, Vizio has managed to increase its user-generated revenues from its existing base of customers.
Both scenarios are favorable to the strategy behind SmartCast and, by extension, should be looked at as opportunities for all smart TV vendors. However, we need a longer run of data to see if the SmartCast revenues will continue to deliver to Vizio’s bottom line, assuming TV sales are lower or flat. In reality, Vizio doesn’t need TV sales growth to succeed with this strategy so, it’s a great hedge against the vagaries of the consumer market.
It’s not a definitive endorsement of Vizio’s approach, but it certainly validates what Display Daily has been saying about subscription and advertising revenues models for the TV business. Think of it as optimizing and maximizing the revenue potential of eyeballs that rely on your displays. That’s convincing enough.
The most important thing, though, is that the applications, the data collection, the advertising, and the services all have to be spot on. That means that the user has to be engaged, and see the value. That’s a whole different discussion.
Vizio’s Second Quarter 2023 Financials
Vizio reported net revenue of $394.4 million for Q2’23, a slight decrease from the $408.9 million recorded in Q2 2022. However, the company’s Platform+ net revenue showcased substantial growth, reaching $142.3 million, representing an impressive 28% increase. This platform’s gross profit also demonstrated substantial growth, with a recorded value of $85.8 million, marking a 23% surge.
| Operational Metrics | Q2’23 | Q2’22 | Change |
| Smart TV Shipments | 1.0 | 1.1 | (11)% |
| SmartCast Active Accounts (as of) | 17.6 | 16.1 | 10% |
| Total Vizio Hours | 8,852 | 8,154 | 9% |
| SmartCast Hours | 4,952 | 4,281 | 16% |
| SmartCast ARPU | $30.55 | $25.87 | 18% |
The company’s overall gross profit reached $86.1 million, which reflects a notable 17% increase from the previous year. Vizio’s net income for this quarter amounted to $1.9 million, slightly lower than the $2.3 million recorded in Q2’22.
What is SmartCast?
SmartCast is Vizio’s smart TV platform that allows you to stream content from your mobile devices, computers, and other compatible devices to your Vizio TV. It is a built-in operating system that does not require you to connect an external streaming device.
With SmartCast, you can:
- Stream movies and TV shows from popular apps like Netflix, Hulu, and Disney+.
- Mirror the screen of your smartphone or tablet to your TV.
- Cast music from your favorite streaming services to your TV.
- Use your voice to control your TV with the Google Assistant or Amazon Alexa.
SmartCast is available on most Vizio TVs that were released after 2016. To check if your TV has SmartCast, you can look for the SmartCast logo on the back of the TV or in the user manual.
Here are some of the benefits of using SmartCast:
- It’s easy to use. Just connect your devices to the same Wi-Fi network as your TV and start streaming.
- It’s compatible with a wide range of devices. You can stream content from your smartphone, tablet, computer, or even a game console.
- It’s affordable. Vizio TVs with SmartCast are typically more affordable than TVs with other smart TV platforms.
Vizio makes money from SmartCast primarily through advertising and data collection.
- Advertising: Vizio shows ads on the SmartCast home screen and in some apps. These ads are typically non-intrusive and can be easily skipped. However, Vizio can earn a significant amount of money from these ads. In 2021, Vizio’s advertising revenue was $2.2 billion, which accounted for more than half of the company’s total revenue.
- Data collection: Vizio collects data about its users’ viewing habits through SmartCast. This data can be used to target users with ads that are more likely to be relevant to them. Vizio can also sell this data to third-party companies. In 2021, Vizio’s data revenue was $1.2 billion.
In addition to advertising and data collection, Vizio also makes money from SmartCast through:
- Subscription fees: Vizio charges a monthly subscription fee for some of its premium features, such as the ability to record shows and movies.
- Hardware sales: Vizio sells TVs that come with SmartCast built-in. The company makes a profit on each TV that it sells.
