More than one-third of customers who have a Vizio smart television set are still watching linear content through a traditional cable or satellite set-top box, the company's top financial executive revealed on Wednesday.
The data point, revealed by Vizio's Chief Financial Officer Adam Townsend, was collected from surveys sent to select Vizio customers. That survey found 38% of customers still use cable or satellite, and around 30% have dropped their cable or satellite service entirely, Townsend said.
Those data points are important to Vizio as the company shifts its focus from sales of its television and soundbar hardware — which have been relatively flat, according to the company's recent quarterly earnings reports — toward the development, maintenance and marketing of its SmartCast streaming platform, which is baked into all Vizio smart television sets sold within the past few years.
On Wednesday, Townsend told attendees of the BofA Securities 2022 Media, Communications and Entertainment Conference that Vizio has the ability to pull granular data from its smart television users — from the amount of time they watch a streaming service through the product, to the types of games customers play using a console connected to a Vizio TV set.
"Fifty-three percent of the time spent on our TVs is on the [SmartCast] streaming platform," Townsend affirmed. "Only about 7% of the time someone is using our TVs, they're using an external media player."
Townsend said Vizio's SmartCast platform is an attractive value proposition for customers because it offers a complete, out-of-the-box solution: When someone buys a Vizio TV set, it comes preloaded with popular streaming apps like Netflix, Disney Plus, Hulu, Amazon Prime, YouTube and others. SmartCast also offers access to WatchFree Plus, an ad-supported service that offers free access to 250 linear streaming channels of content.
"It's a great value proposition in that customers don't have to buy another streaming solution," Townsend said. "You can buy a Vizio TV, take it out of the box, hook it up to your Wi-Fi and start streaming."
The amount of data Vizio collects from users is a good value for the electronics firm and its partners, too. Using that data, Vizio has sold advertisements on the home screen of SmartCast and within some of its linear channels on WatchFree Plus. Last month, Vizio said it raked in over $69.9 million in profit from its streaming platform; on Wednesday, Townsend said 95% of the company's overall gross profit was from streaming.
"It really changes the way we can be strategic in the market in the way we can get more TVs sold, getting into homes, growing our active account and install base, and generating more profitability and ARPU from the platform," Townsend said. "It's been a two-decade effort, but the marketplace is right where we want to be, and we're excited about what's to come."
Vizio has the second-biggest share of the smart TV market, Townsend said, with only Samsung ahead of it. Helping to fuel its market share is general awareness of the Vizio brand coupled with its easy-to-use platform, budget pricing and partnerships with retailers like Walmart and Target, which is where most of Vizio's TVs are sold.
"Because of where we are selling, we're very aligned with the average across U.S. demographics," Townsend said. Those demographics are attractive to certain media buyers who want to promote their brands to the general domestic market, he affirmed.
"We promote that and highlight that to our ad buyers, so they understand who they're reaching," Townsend said, adding that Vizio is "incredibly well-positioned" to take advantage of a trend where ad money is shifting toward connected TV (CTV) platforms and away from traditional media.
"The ability to target down to the individual household is really attractive for a lot of businesses," he said.