In a major move into the connected TV space, the retail giant Walmart is acquiring the smart TV maker Vizio in a deal that values the company at $2.3 billion.
Walmart said in a press release Tuesday morning that Vizio would help the company grow its nascent advertising business, and also give it a foothold in “innovative television and in-home entertainment and media experiences.”
The deal, if completed, would instantly make Walmart a a major player in the streaming TV wars, which counts Roku, Samsung and tech giants Amazon, Google and Apple among its competitors. While many companies sell sticks and boxes that hook in to TVs and serve as an OS for streaming (Roku, Amazon’s Fire TV stick and Apple TV being the most popular), TV makers have gained ground by preloading their sets with advanced operating systems.
Samsung, Vizio, LG and Hisense are among the TV makers that have been aggressively investing in the space, with other players seeking to launch their own TV sets to compete. Both Roku and Comcast have launched their own TV sets in recent years, preloaded with their OSes, seeking marketshare.
By betting that they can make money from consumers through both data-sharing and advertising, the cost of TV sets has come down dramatically in recent years as TV-makers adjust to a streaming-first world.
“There is a lot to be excited about with this acquisition,” said Seth Dallaire, executive VP and chief revenue officer for Walmart U.S., in a statement “We believe VIZIO’s customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling. Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”