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Big Retailer Buys TV Company In Effort To Sell Advertising To Suppliers

Walmart has agreed to pay $2.3 billion to acquire smart television maker Vizio and it has nothing to do with the sale of a TV, with analysts tipping that the retailers next move could be to buy a streaming service.

Their primary objective with the Visio TV brand, which has for several years been a key player in the US TV market having held top spots for many years, is to bolster the retailer’s burgeoning advertising business as it takes on rival Amazon.

The loser could be Roku, who up until recently was supplying Telstra with a puck according to analysts.

According to the New York Post Roku, which also sells smart TVs and streaming devices, had until recently an exclusive deal with Walmart to sell their products.

The big benefit for Walmart is that several years ago and before Google, Samsung and LG Electronics developed their operating system the US TV Company developed an OS and then started selling access to the OS and their customers to streaming Companies, taking a click of the revenue stream along the way.

Shares of Roku fell by nearly 7% last night.

Andrew Lipsman, an independent media analyst claims “This accelerates Walmart’s advertising as it moves into streaming TV opportunities,” said.

The acquisition could make Walmart a bigger presence in the TV streaming wars, especially if Walmart acquires a streaming service, Lipsman said.

Roku, a streaming competitor, last week noted that television advertisers are increasing the amount they spend on streaming ads as customers continue to move away from free to air TV.

Currently Roku and Amazon sell advertising space on their various streaming channels and home screens, they also sell market licensing arrangements for companies to put their brand on certain shows while also selling access to their apps as consumers order groceries.

Walmart believes it can add revenue by offering brands the opportunity to advertise on Vizio televisions.

Currently Vizio’s Smart TV operating system, SmartCast, has more than 18 million active accounts.

The deal would give Walmart more ways to offer ads through Vizio televisions, as well as create entertainment options exclusively for customers with Vizio TVs.



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