Vizio today presented its S-1 to the United States Securities and Exchange Commission, while the TV and soundbar maker is heading for an initial public offering. “We envision the Vizio smart TV as the center of the connected home – where families play together, where friends watch movies together, where work and learning take place and where everything happens in between”, founder, president and CEO of Vizio William Wang wrote in a letter that opens the S-1. “Going public is an important milestone for us, as we continue to grow and achieve our goals.”
The lawsuit reveals that Vizio has sold more than 80 million TVs and 11 million soundbars since the company’s founding. It sold 7.1 million TVs in 2020. Vizio TVs have long provided performance and picture quality well above its price, although in recent years competitors like TCL have tried to outperform the company in this regard. “We will continue our successful hardware business, iterating on models as we did before, while building our name on smart TV software,” said Wang.
The S-1 begins with Wang reporting on his survival from a plane crash. “I ran to the front of the plane, forced the emergency door open and jumped out,” he said. “I will spare the complicated details, but let’s just say that I am beyond grateful to be here today, writing this letter.” According to Wang, his renewed appreciation for being at home – and a desire to make it “everyone’s favorite place” – led to the creation of Vizio.
But the future is more about software and platforms than about selling TVs, where profit margins are often slim. Later in the process, Vizio says:
While we manage a significant majority of our total net revenue from sales of our Smart TVs and sound bars, our Platform + net revenue grew 304.4 percent from $ 36.4 million in 2018 to $ 147.2 million in 2020. We believe that Platform + will be the main driver of our future margin growth and financial performance.
“Platform +” refers to a combination of SmartCast (the software that runs on Vizio TVs) and Inscape, which is Vizio’s data recognition, analysis and content subsidiary. S-1 points out that the company continues to see huge advertising potential for its video on demand (AVOD) services, such as WatchFree and Vizio Free Channel. It also sells advertising space on the SmartCast home screen and obtains a percentage of subscriptions and purchases made on third-party applications on its platform. In addition, Vizio charges streaming partners to place their logo on branded TV boxes or remote buttons. The company says that there are currently more than 12 million active SmartCast accounts. (Interestingly, Vizio also reveals that there are 5.3 million TVs connected to the Internet still running its legacy software.
(Important background on Vizio’s data practices: the company agreed in 2017 to pay the FTC $ 2.2 million on charges that the company was tracking customers’ viewing habits without obtaining sufficient consent. These same concerns also led to to a $ 17 million class action settlement.)
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Vizio tried to completely reinvent the TV experience in 2016, removing all integrated apps from its first SmartCast TVs. Instead, TVs relied on “streaming” content from entertainment apps on mobile devices. The company also briefly abandoned the traditional TV remote control and bundled an Android tablet with these TVs. These two great experiments were curbed a few years later, with Vizio again bundling popular apps on its TV platform (maintaining the same casting capabilities as before) and returning to a normal remote control.
The risk factors in the S-1 are all fairly standardized, although Vizio recognizes the sometimes turbulent relationship between streaming app companies and platforms. “If we are unable to provide a competitive entertainment offering through SmartCast, our ability to attract and retain consumers would be impaired,” says the document.
Vizio says he envisions the future of SmartCast expanding beyond pure entertainment to include the following:
Communication: Getting involved with social networks, using messaging services and accessing teleworking resources, such as videoconferencing.
Fitness and well-being: Connecting to interactive fitness and wellness services, such as personal training sessions and exercise monitoring, from the comfort of your own living room.
Business: Browse online shopping services, buy products featured on TV as part of dynamic ads, and place orders for food on delivery services via voice control.
Community: Host integrated virtual watch groups for the latest movie or big game; watching live sports on TV will become an interactive experience through play-along games.
Dynamic entertainment experiences: Attend virtual concerts or sporting events that offer experiences with multiple cameras controlled by the viewer.
Vizio requested that its shares be listed on the New York Stock Exchange under the symbol “VZIO”.