Why LG’s WebOS Could Generate More Profit Than TV’s
The answer to why LG Electronics decided to give away their WebOS to their competitors can be found in the latest financials of US TV brand Vizio who has revealed that they are making more money selling subscriptions and advertising on their proprietary Platform Plus than they are selling TV’s.
12 months ago, Vizio, who at one stage was the #2 TV brand in the USA became a publicly traded company, in their latest filing the company revealed that shipments of its TVs fell to 1.4 million in 2021 compared to 2.1 million in 2020, a drop of 36 percent due to COVID, shipping logistics and supply problems.
Despite this the Companies Platform Plus revenue shot up 136% with the Company raking in pure profit from taking a cut of the subscription revenue when consumers signed up to apps such as Netflix, Paramount +, Disney and others that are available via their platform.
Unlike Vizio LG Electronics has a worldwide audience and millions of TV sets running WebOS which delivers over 25 apps making services such as Britbox, Disney, Foxtel, Stan and Paramount + available to consumers.
Then some bright spark had the idea to give away the former Palm software which LG Electronics paid HP $1.2 billion for to other brands, such as Bauhn which is sold by Aldi, Blaupunkt as well as several other global brands.
They also have moved to take a cut of subscription and advertising revenue.
Samsung is also moving to deliver their own movie service when collecting data on their competitors’ customers who watch apps via their TV.
Where the numbers are growing for Vizio are with their 14 million active SmartCast accounts.
During the past two years Vizio has, doubled the revenue it gets from each customer from $10.44 to $19.89.
On last night’s call with analysts, Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its Watch Free Plus package of streaming channels, a group that recently expanded with content targeting.
The next biggest contributor is the money it makes selling Inscape data about what people are watching.
The TV Company counts money made from selling ad placements on its TV home screens, deals for the buttons on remotes, ads that run on streaming channels, its cut from subscriptions, and viewer data that it tracks and sells as part of the InScape program.
In Australia Samsung is collecting vast amounts of data on the viewing habits of people who own one of their TV’s.
The Company has not said what they do with the data or whether this data is provided or sold to third parties.
When Vizio filed to go public, it described the difference between the two divisions. While Devices is easy to understand — 4K TVs, soundbars, etc. — Platform Plus is a little more complicated.
Vizio and LG Electronics isn’t the only smart TV maker that’s really into the advertising and subscription business these days.
Roku is also raking in money for its TV OS and streaming boxes and from partnering with the likes of TCL in the US market.
Roku CEO Anthony Wood is very up front about its true model. Roku’s most recent report revealed that on average it’s pulling in $40 per month on each user, or more than double what Vizio manages.
The Verge recently revealed that a few years ago, Vizio got in trouble with the FTC for not properly informing customers before they became a part of the tracking program.
It disabled the system on older TVs, paid a couple of million bucks to settle the fine, and moved forward with its new SmartCast tech that focuses on streaming and makes sure new owners get a warning about what they’re opting into.
In Australia the Samsung information about data collections is buried in the small print of one of their condition pages.