Retail giant Walmart has officially scooped up Vizio, completing a $2.3 billion acquisition of the smart TV maker and its TVOS platform, the company announced Tuesday.
First announced in February, the merger closed following expiration of the waiting period under federal regulations with no opposition. Under the deal, Walmart paid $11.50 per share in cash for Vizio and its SmartCast Operating System, equating to equity value of about $2.3 billion. As a result, Vizio is now a wholly owned subsidy of the retailer, reported as part of the Walmart U.S. segment going forward, and will be delisted from trading on the NYSE effective as of the close of market today.
The purchase plants Walmart in the midst of the increasingly crowded TVOS market, in which CTV advertising has become more of an opportunity and growth driver compared to hardware sales – including for Vizio. As Walmart noted in its announcement, Vizio’s Platform+ business segment – which is largely made up of its advertising business, now comprises all the company’s gross profit.
Walmart eyed Vizio as a target, in part to pair the platform with its Walmart Connect retail media business in the U.S. According to the announcement, Walmart views Vizio and its TVOS as a way to serve retail customers in new ways and bring to market differentiated advertising avenues for brands through their investments in Walmart Connect – providing connection to customers at scale and ways to enhance product discovery.
“Vizio offers great products at great prices that customers love. They’ve always put customers at the center of their business – and that’s core to Walmart’s values and the omnichannel experiences we’re excited to roll out,” said Seth Dallaire, executive vice president and chief growth officer of Walmart U.S., in a statement. “Vizio has also expertly changed their business over time, like building and quickly scaling a profitable advertising business. Pairing it with Walmart Connect will be impactful and allow us to invest in our business even further on behalf of our customers.”
Founded in 2002, Vizio has a smart TV OS presence in the U.S., counting about 19 million active SmartCast accounts. In the past few years, it built a profitable and growing CTV advertising business that has proved to be a revenue growth driver for the company over several consecutive quarters, including Q3 as revenue from TV hardware sales declined.
Vizio’s OS is also home to the built-in free ad-supported streaming TV (FAST) service WatchFree+, which offers up programming via linear streaming channels and on-demand content, subsidized for free access to consumers through advertising. This year it expanded access to WatchFree+ outside of the Vizio smart TV ecosystem for the first time, making it available on mobile devices via the Vizio Mobile app.
TV OS players like Vizio have been utilizing the CTV home screen and other avenues in the UI as monetizable real estate, while also delving into new types of sponsorship and brand partnerships, including content, such as with Vizio’s Branded Content Studio that launched in May 2023. That’s provided branded content opportunities with an end-to-end CTV shopping experiences. For example, a second season of Tom Colicchio’s shoppable series “The Pantry,” debuted on Vizio WatchFree+ in November, presented by Ninja through a Vizio-SharkNinja partnership that was spearheaded by Horizon Media. The latest effort of the Branded Content Studio, the series integrated SharkNinja’s kitchen products into episodes and leveraged QR codes for viewers to purchase products on their mobile devices. Ninja promoted the show with dedicated placements on the Vizio home screen for visibility and more brand immersion.
In addition to an avenue to reach consumers, CTV operating systems increasingly provide the entry to viewing and serve as a jumping off point for content discovery and user engagement, meaning Vizio – and now Walmart – benefit from viewing data, which can be paired with Walmart’s first-party retail shopper data to help advertisers better target and provide closed-loop attribution on campaigns.
Pairing CTV and retail media
Brands and retailers have been pursuing CTV and retail media pairings, where Walmart could strengthens its position with the purchase of Vizio.
Others, such as executives at Target’s retail media business Roundel previously cited the CTV channel as a “rising star”. Earlier this year, Evan Hovorka of Albertsons Media Collective – the retail media arm of U.S. food and drug retailer - pointed to CTV as an ideal middle ground for brands.
“I see CTV as the perfect middle ground where we can still hit very inspirational, creative, inspiring messages to a targeted audience tied to all the things retail media is looking for, which is closed-loop SKU-level sales to an individual,” Hovorka said during a roundtable in August.
Now Walmart has Vizio assets under its belt that could help further solidify connections between TV audiences and its retail brands and advertisers, and potentially better compete with the likes of Amazon.
Walmart Connect grew 26% yoy in Q3, offering Walmart suppliers and sellers opportunities to reach consumers across on-site and off-site digital channels and in-store.
And investment in offsite channels, including CTV, for retail media is expected to grow. A forecast from Advertiser Perceptions projected more than $20 billion in spend in offsite programmatic retail media (which includes CTV) ad spend for 2025, up from $7.3 billion in 2023 and representing half of the programmatic ad spend market next year.
A competitive TV OS space
That said, Walmart is bringing a TV OS and CTV advertising business under its roof at a time when the market is already crowded with incumbent and new entrants alike. That includes established leaders like Roku and e-commerce giant and Walmart competitor Amazon, as well as independent DSP The Trade Desk, which was the latest to join the fray when it officially announced its TV OS Ventura in November, among several others.
In a blog post following the initial acquisition report, nScreenMedia analyst Colin Dixon noted how Vizio would allow Walmart to capitalize on similar CTV benefits Amazon get from Fire TV, including to provide direct attribution for advertisers from viewers seeing an ad to purchase activity.
“Definitive attribution makes the ads far more valuable to brands,” Dixon wrote earlier this year.
Walmart, for its part, has been striking and testing several partnerships with streamers that incorporate commerce – including shoppable pilots with Roku and NBCUniversal’s Peacock, and retail data sharing collaborations.
Before Walmart announced plans to buy Vizio, the smart TV maker disclosed it was exploring licensing its OS to third-party OEMs for the first time. nScreenMedia’s Dixon previously suggested Walmart could replace its in-house Onn brand TV devices with the SmartCast platform and follow through on plans to license the Vizio OS to third parties. But whether or how that will play out remains to be seen.
For the foreseeable future Vizio will continue to operate independently from Walmart, with founder William Wang continuing to helm the company as CEO, reporting to Walmart’s Dallaire.
“Since the inception of Vizio, our mission has been to provide incredible value, great technology, and award-winning innovation,” said Wang in a statement. “Today, with the tremendous number of resources from Walmart, we will continue to further accelerate that mission around the best home entertainment experience.”