In a significant move, retail giant Walmart has taken over Vizio, a well-known manufacturer of televisions. This strategic acquisition targets Amazon's robust streaming services head-on.
Vizio is not just a TV maker; it's also a tech pioneer with its SmartCast system, which boasts a user base of 18 million. This platform offers viewers an ad-supported option, positioning it as a competitor to Amazon's Fire TV service.
Walmart's $2.3 Billion Bet on TV Streaming
Walmart has made a significant move in the tech world by agreeing to purchase Vizio for $2.3 billion, a deal announced this Tuesday. This step is not just about expanding its product range; Walmart and its warehouse chain, Sam's Club, have long been key sellers of Vizio's devices.
The heart of Vizio's appeal lies in its SmartCast Operating System, which allows users to stream free, ad-supported content. This feature has made Vizio TVs popular among consumers seeking convenient streaming options.
This acquisition is more than just adding a product line for Walmart. It represents a strategic shift towards enhancing its advertising business. By owning Vizio, Walmart aims to tap into the lucrative world of streaming and advertising, marking a new chapter in its business expansion."
Walmart's latest business strategies emerge as Amazon introduces new charges for its Prime members. Just last month, Amazon announced an additional fee of $2.99 per month for Prime members who want to watch movies and TV shows without ads. This new charge comes on top of the existing Prime membership cost of $14.99 monthly or $139 annually.
This decision by Amazon has been a talking point among consumers and businesses alike, as it marks a shift in the streaming service's pricing structure. Meanwhile, Walmart's recent moves in the streaming and TV market are seen as a response to these changing dynamics in the digital entertainment industry.
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Walmart Dives into Advertising with Vizio Buy
Walmart is eyeing an increase in revenue by offering brands the opportunity to advertise on Vizio televisions. With the recent acquisition of Vizio, known for its SmartCast operating system with over 18 million active accounts, Walmart is looking to expand its advertising capabilities.
This move offers Walmart new ways to display ads through Vizio televisions and create unique entertainment options for Vizio TV customers. According to Neil Saunders, a retail analyst at GlobalData Retail, this strategy gives Walmart a significant boost in the advertising sector, putting it on par with major competitors like Amazon.
The focus on advertising is part of Walmart's broader strategy to diversify its revenue streams. With groceries, which account for over half of Walmart's sales, offering minimal profit margins, and recent heavy investments in digital operations, the company is looking to advertising as a way to increase profits.
This approach is key to offsetting Walmart's substantial spending and improving its financial performance.
Saunders emphasized that Walmart's business strategies are transforming the retail industry. He noted that retail is no longer just about selling products; it's becoming increasingly diversified.
At the forefront of this change is Walmart's effort to leverage its vast customer reach for advertising purposes. The company has been pitching advertisers with its unique capability to connect with a broad audience.
With an impressive 90% of Americans shopping at Walmart each year and its platforms attracting about 160 million visitors weekly, Walmart has a significant advantage.
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