In recent years, TV maker Vizio has built a reputation among home theater enthusiasts as the company that makes TVs that offer superior picture quality for their cost. While the most expensive TVs from Samsung and LG beat Vizio’s in quality rating by reviewers, Vizio is widely regarded as one of the best value-for-buck brands.
But for consumers, those competitive prices can have a downside: they are subject to targeted advertising and the collection of personal data to monetize them. As previously reported on Engadget, Vizio just released its first public earnings report, revealing that the quarter’s profits from the portion of its business built around collecting and selling user data and targeting ads to users totaled $ 38.4 million.
That’s less than the $48.2 million in profit generated in the same quarter from device sales, but data and ad profits grew significantly year over year, while actual device sales grew relatively slowly. However, these digital products are still nowhere near device sales in total revenue; the data and advertising-related business unit (called Platform+) accounted for just 7.2 percent of global revenue.
Still, that was enough to improve the financial picture for the California-based company’s long-delayed stock market debut. CNBC reports that Vizio’s TV device business has shrunk in recent years. As any business should, Vizio has been trying to find additional revenue streams to make up for that misstep. The streaming platform, SmartCast and other advertising and data related activities made a big difference to the company as it tried to convince investors to buy shares in its offering.
Device sales grew just 7 percent year over year, but Platform+ grew 133 percent over the same period.
SmartCast collects user data, delivers ads, and also gives Vizio a discount on subscription sales to other services done through the platform, such as Netflix. This has become very common in the TV business and Vizio isn’t the only company running ads or collecting user data. The practice has become so common that normally tech-focused review sites like Rtings have come to view the advertising approach as an important metric when rating televisions for potential buyers.
Vizio had net sales of $505.7 million and a gross profit of 82 percent. However, investors have expressed concerns about the company’s ability to remain competitive with other streaming platforms, and Vizio’s market debut performed on the low side of expectations. The stock was valued at $27.41 per share at market close today.