Potential Walmart-Vizio Deal Could Shake Up TV Market But Will It Happen?

In what would be a surprise and potentially game-changing move, Walmart is reportedly in discussions to acquire Vizio, a popular maker of smart TVs and soundbars, for $2 billion. Nothing is set in stone, but according to The New York Times, discussions are ongoing. The appeal for Walmart isn't just to sell TVs, which is a crowded space these days, but the massive ad space and data collection possibilities.

It's an interesting development, especially given how competitive the landscape has become. For a long while, Vizio made a splash by punching above its weight, in terms of pricing and features. However, companies like TCL and Hisense have drawn the lion's share of attention in the bang-for-buck segment, adding features like mini LED backlighting at competitive price points. Likewise, Amazon has begun throwing its enormous weight around with its own branded TVs, as well as pitching Fire TV models from established brands.

According to NYT, advertisers are spending big money on retail media space—citing data from Insider Intelligence, the outlet states advertisers will spend close to $60 billion this year, which is up almost a third compared to last year.

Walmart is poised to capitalize on the growing trend, and not just in its own chain of stores but also its Sam's Club locations. The retailer could sell ad space on Vizio TVs in all of its stores. Additionally, it would give Walmart an arguably more recognizable brand to pitch to customers versus its Onn-branded TVs.

As NYT points, the deal (if consummated) would also give Walmart access to Vizio's smart TV platform, which accounts for 8% of TV operating systems. That's a good chunk below Roku's 25% share (Walmart's Onn TVs run Roku's smart TV platform), but it's not insignificant. It's also a growth opportunity, if Walmart can manage to increase Vizio's footprint among consumers. It's also worth noting that Walmart accounts for a large chunk of Roku's device sales.

Vizio, which is headquartered in Irvine, California, saw its shares shoot up by nearly 35% in after market hours following the report.