Walmart Seals Deal to Buy VIZIO for $2.3 Billion, Gaining Control of VIZIO WatchFree+
Walmart’s efforts to build its ad business took a huge leap forward this week, as it now has a new digital platform to distribute ads with.
Hopefully Walmart checked its balance online before running this particular credit card transaction! A Tuesday morning press release from Walmart and VIZIO has revealed the retail giant is executing its purchase of the smart TV manufacturer, in a deal that’s reportedly worth $2.3 billion. Word first began to circulate about the transaction last week, and now it appears the deal is official.
- Walmart’s purchase of VIZIO is mainly in the name of building its Walmart Connect ad business.
- The transaction will allow Walmart to distribute more ads on VIZIO smart TV menus, as well as on its free streaming platform WatchFree+.
- Walmart also gets access to valuable customer information which is proprietary to smart TV manufacturers.
VIZIO now has 18 million customers using its SmartCast operating system (OS) via its smart TVs. That’s a 400% increase since 2018, and though it’s a far cry from the 80 million active accounts that Roku has on its devices, it still gives Walmart a large base of new customers to serve ads to.
That’s the main drive for Walmart in executing its purchase of VIZIO. The retailer wants to use VIZIO’s OS to distribute more ads, using smart TV menus as well as VIZIO’s free ad-supported streaming platform [WatchFree+ $]. Walmart can also leverage proprietary customer data owned by VIZIO about its viewers and their watching habits, in order to more effectively steer them toward products sold in Walmart stores. Walmart already carries a large line of VIZIO smart TVs in its stores, starting at around $350.
“There is a lot to be excited about with this acquisition,” said Seth Dallaire, EVP, Walmart U.S. “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.”
The purchase is seen by many financial analysts as a way for Walmart to continue competing with Amazon. That retail giant owns a smart TV OS and ad-supported streaming platform as well, using its Fire TV devices and Freevee streamer to distribute ads and pull in higher revenues as a result.
“We believe this is the ideal next chapter in VIZIO’s history, “said VIZIO CEO William Wang. “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.”
What is the Future of VIZIO WatchFree+?
WatchFree+ carries hundreds of ad-supported streaming channels and thousands of on-demand titles, all free to watch. When analyzing the VIZIO/Walmart deal, The Streamable believes that audiences won’t see much in the way of major changes to WatchFree+, at least not initially.
The most apparent change initially will likely be an increase of Walmart-related ads on WatchFree+ content. These could be ads for the retailer itself, or for products that the particular viewer might be interested in buying from their local Walmart; those ad offerings could also be based in part on past viewing habits on WatchFree+.
This may sound a bit grasping on Walmart’s part, but its behavior is no different than any other smart TV maker. One of the main reasons smart TVs are so cheap nowadays is because manufacturers sell some customer data directly to advertisers, which brings in far more revenue than the sets themselves. Walmart is simply trying to catch up to the competition by picking up a smart TV OS of its own.
In the press release announcing the purchase, Walmart said it had the opportunity to create “innovative television and in-home entertainment and media experiences.” That could mean some bigger changes are eventually in store for WatchFree+, or that Walmart has other streaming designs in the planning stages. But for the present, audiences shouldn’t expect an immediate transformation of WatchFree+, even as Walmart and VIZIO have officially agreed to terms on a sale.
VIZIO WatchFree+
WatchFree+ is VIZIO’s free streaming service, available on its SmartCast TVs. There are 260+ free channels and 6,000 titles on demand, providing immediate access to live and local programming and a wide library ranging from thousands of movies, news, sports, music, kids & family, multicultural, and more. Top channels include CNN, FOX Sports, Hallmark, ION Plus, LEGO Channel, MLB, NBC News Now, and Stories by AMC.