Retail giant Walmart is acquiring the smart TV maker Vizio via a deal that values the company at $2.3 billion.
Walmart said in a press release Tuesday morning that Vizio would help the company grow its nascent advertising business and give it a foothold in “innovative television and in-home entertainment and media experiences.”
The deal, if completed, would instantly make Walmart a major player in the streaming TV wars, which count Roku, Samsung and tech giants Amazon, Google and Apple among the competitors. While many companies sell sticks and boxes that hook into TVs and serve as an OS for streaming (Roku, Amazon’s Fire TV stick and Apple TV being the most popular), TV makers have gained ground by preloading their sets with advanced operating systems.
Samsung, Vizio, LG and Hisense are among the TV makers that have been aggressively investing in the space, with other players seeking to launch their own TV sets to compete. Both Roku and Comcast have sold their own TV sets in recent years, preloaded with their OSes, seeking market share.
Since companies are betting that they can make money from consumers through both data-sharing and advertising, the cost of TV sets has come down dramatically in recent years as TV-makers adjust to a streaming-first world.
Walmart has been seeking to grow its advertising and data business in recent years, mirroring efforts from competitors Amazon and Target. All three companies leverage their consumers’ purchasing history to target them with ads, though Amazon with its Prime Video division has been the most successful of the retail companies in the ad space.
With its scale and foothold across the U.S., Walmart may be able to expand Vizio’s reach, giving it a better ability to target consumers in their living rooms and bedrooms. While streaming services like Netflix, Max and Prime Video all now serve ads to subscribers, most consumers first turn on their smart TV, Roku or Apple TV to access the apps, making the TV OS extremely valuable real estate.