EXCLUSIVE: CE Retailers Looking At Ways To Generate Trailing Revenue From The TV’s They Sell

A new retail race is emerging, with retailers, including CE retailers now looking to generate trailing advertising and subscription revenue from devices such as TV’s sold by retailers, they also want to sell access to customer data similar to what Walmart in the US is doing following their acquisition of the Vizio TV brand earlier this week.

ChannelNews understands that among the retailers exploring new ways to generate additional revenue streams from products they sell are both Harvey Norman and JB Hi Fi who also own the Good Guys these two Companies are the biggest seller of TVs in Australia with Harvey Norman believed to have already made a first move.

These retailers have seen what is happening overseas and are currently exploring new ways to take a click of the revenue gleaned from subscribers who sign up for a subscription on a product sold by the retailer or pay for advertising on a TV sold by the retailer. They also want to sell advertising to brands whose products they sell similar to what Woolworths currently do with their Cartology business.

Last night the Foxtel Group launched their new Hubbl streaming puck, there was no mention of the Harvey Norman Hubble Glass TV deal despite Harvey Norman management confirming that they will shortly reveal a $1,500, 55” Hubbl Glass TV along with a $2,000, 65” Hubbl TV as exclusively revealed by ChannelNews last week.

The night was all about their new Hubbl puck.

We now understand that Harvey Norman management had tried to get a trailing revenue deal with the Foxtel Group in an effort to generate revenue if a Harvey Norman customer signed up for an app on the TV sold by Harvey Norman.

We have been told the deal was denied.

Earlier this week, Walmart, the largest U.S. company by revenue with A$989 billion in sales last year, announced the acquisition of US TV Company Vizio one of the largest manufacturers of web enhanced “smart” television sets.

Walmart will also acquire Vizio’s SmartCast operating system which gives them access to 18 million live accounts.

ChannelNews understands that one retailer along with a TV distributor in Australia, has already approached Visio to explore the concept of being able to bundle their OS onto a TV in Australia, a move that would also allow them to sell advertising take a click of the revenue and glean data on their lifestyles, when a subscriber signs up for content whether it be a video, access to a sports game, music or games downloads.

One distributor who supplies CE retsailers said “In ten years time Australia will have a population of 30 milllion plus. What retailers are now looking at is future revenue because the future is going to be about click revenue streams with a device being the means to generate additional revenue”.

“Both Samsung with Tizen and LG Electronics with their Web OS are also cometing for a share of the revenue and their 10 year plan is already in place”. they said.

At last night’s Hubbl launch US Comcast executives said that the future for Hubbl is not just about entertainment and sport, they outlined the Hubbl puck being used to access video streaming, music, cloud gaming and paid for fitness classes.

The Vizion SmartCast OS which Australian retailers are now taking an interest in is embedded in all Vizio TV sets and is a major revenue earner for the business outside of the sale of a TV.

The platform offers native access to popular streaming apps similar to Hubbl, along with linear content streams similar to what Foxtel Group is doing with Australia’s free to air TV networks.

In the past Vizio’s revenues outside of a TV sale were bolstered by advertisements, and a share of subscription sign up revenues.

Prior to Walmart buying the business this week, the unique Vizio OS revenue stream made up a big part of the company’s business.

During the last quarter, Vizio earned A$283.5 million in Platform Plus revenue — a 28% year-over increase — after growing its Platform Plus user base.

In Australia retailer similar to Walmart, not only have access to large numbers of customer they also have access to brands who want to get access to the retailers’ customers.

The number of Vizio SmartCast OS accounts has increased by about 400% since 2018 as consumers upgraded to larger $K high-definition TV’s.

The SmartCast OS will now provide Walmart with insightful first-party information including the purchasing and viewing habits of consumers, allowing for more targeted ad messaging.

Hence, Walmart’s acquisition was more about the sale of advertising to their suppliers and getting access to the vast amount of data and shopping insights Vizio can provide than selling television sets.

As a result of the deal, Walmart will become an active participant in connected TV advertising, competing head-to-head with free to air TV stations as well as platform operators Roku, Amazon, Google and streaming services such as Prime Video who this week announced that they will be selling advertising in their entry level subscriptions.

In Australia Woolworths is already generating millions from the sale of advertising to brands.

Woolworths boss Brad Banducci who quit yesterday after a train wreck interview over price gouging, has admitted that Woolworths management he has ambitions to significantly expand the supermarket’s media business.

Last year the retailer who is facing a massive investigation into their price gouging, began to integrate the Shopper Media business, acquired in 2022 into its Cartology unit which sells advertising to brands whose products are sold in their stores.

In Australia, PwC estimated the retail advertising market is worth about $1 billion in revenue and could triple by 2026.

Cartology was founded in 2019, and it is estimated that it posted more than $300 million in revenue in the 2021 financial year.

Woolworths does not break out this figure in its accounts for the simple reason that they don’t want to reveal how much money they are getting from brands over margin and incentives.

What we do know is that their direct sell advertising business grew by over 12% last year, which was more than their Big W business did.

In the Woolworths organisation, Cartology sits under Digital & Media, which also includes Rewards & Services, where sales rose 8 per cent to $675 million in the first half.
Woolworths new CEO Amanda Bardwell headed this division.