Retail giant Walmart is making a bold $2.3 billion bet on the future of connected televisions and streaming entertainment by acquiring smart TV manufacturer Vizio. The deal, announced Tuesday, will give Walmart an instant foothold in the increasingly competitive connected TV advertising market dominated by rivals like Roku, Amazon, and Google.
Beyond bolstering its new Walmart Connect advertising division, the company views Vizio as a way to explore innovative in-home entertainment offerings and build deeper customer relationships. With Vizio’s operating system pre-installed on millions of value-priced TV sets, Walmart gains valuable access to viewer data and habits that can inform more targeted and personalized ad campaigns.
The acquisition provides further evidence of Walmart’s aggressive push into advertising to unlock new revenue streams. Vizio’s mature connected TV and data-driven ad platform will significantly accelerate these efforts. Walmart expects the deal to be slightly dilutive in the near-term due to integration costs, but envisions a long-term impact on reinventing the retail-entertainment intersection.
For Vizio, the sale represents potential for greater reach and resources under Walmart’s wing. Walmart’s scale and existing domain authority can help amplify Vizio’s ad business and product lineup. The companies note alignment on customer-focused values driving the union. After failed acquisition talks with Chinese firm LeEco in 2016, going with Walmart’s buyer-friendly image may aid Vizio’s mission.
With smart TV capabilities becoming standard and streaming viewership booming, the deal positions Walmart to control both the programming and the pipes delivering entertainment to consumers in the future. While Walmart is relatively new to the streaming content wars, acquiring an advanced ad-supported connected TV platform gives them both a launching pad and a potential competitive edge in the space. A retail brand may seem an unlikely streaming player, but Walmart just ensured it will have a seat at the table.
