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TV makers get more from ads than from selling TVs

Rajesh Vijayakumar /

Vizio recently became a public company, which has allowed us to learn much more about how you earn your money. It turns out that the company earns more from ads, subscriptions, and data than it does from the sale of televisions. And Vizio isn’t the only one either.

The reports of smart TVs that generate a lot of income for the companies that manufacture them they are nothing new. What’s interesting about Vizio, however, is that the company generates more revenue from ads, subscriptions, and data on its smart TV operating system than it does from selling televisions, as reported in its latest earnings report (h / t The Verge ).

The company calls this area its Platform Plus segment, and it generated a whopping $ 57.3 million in gross profit. The firm’s Devices segment, which is responsible for selling televisions and other hardware, generated roughly half, at $ 25.6 million. However, the television sales portion also generated substantially more revenue, but at a much higher cost of doing business.

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As for what makes money in the Platform Plus area, Vizio sells ad placements, includes buttons on remote controls, runs ads on streaming channels, takes part in subscriptions, and track and sell viewer data as part of the InScape program. These can generate a lot of money with a much smaller investment than in the design and manufacture of televisions, sound bars and other devices.

In fact, Vizio has seen a massive increase in money generated this way. In fact, revenue was up 136% compared to last year, making ad placement and user data increasingly profitable for the company.

Of course, Vizio is not the only company that makes a lot of money this way. According The Verge , Roku, a company known for transmit boxes and sticks, you actually earn an average of $ 40 per month for each user, which is even more than Vizio. And that’s not coming from the sale of the streaming device.

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“We don’t really make money … we certainly don’t make enough money to support our engineering organization and our operations and the cost of money to run the Roku service,” he told The Verge . “That is not paid for by the hardware. That is paid for by our content and ad business.

It’s definitely interesting to think about how much money you’re making for the company that makes your TV long after you’ve finished paying for it. Between subscriptions, ads and your data, the company responsible for making your TV has managed to turn it into a very lucrative long-term investment.

Fortunately, you can disable many of these features and get back to getting the barrage of ads across cable and the platforms you view content on.

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