Roku Should Be Worried About Walmart Buying Vizio





Today, we learned that Walmart is in talks to buy Vizio for more than $2 billion. The retail giant wants to use Vizio to grow its advertising business and to expand and compete with Amazon through Vizio’s free ad-supported streaming service. Walmart may see this as a way to fight Amazon; however, the company the most at risk is Roku.

In the U.S., Roku TVs account for one out of every three televisions sold. It’s also the most popular streaming player with 80 million active accounts at the end of the year. The Roku Channel is one of the largest free ad-supported streaming services; and it’s also the largest seller of ads on Roku TVs. Many Roku players and TVs are sold at Walmart as both companies target a similar budget-minded consumer.

Walmart buying Vizio could create a massive competitor to Roku in some of its most profitable areas.

Roku makes most of its money from ads and subscriptions. If Walmart were able to pull customers away from that market, Roku could be harmed even more than Amazon.

Roku is in a tough spot right now with more competition than ever and a weak ad market that has seen revenue fall not only for Roku but for the entire media industry. Walmart jumping into the market by buying a major player like Vizio could bring one more major competitor to Roku at a time when it is struggling to deal with a saturated market and weak ad sales.

Walmart has also been one of Roku’s biggest partners. Walmart sells Roku products and even Onn versions of Roku products. If Walmart buys Vizio, would that partnership continue?

Now that Walmart and Vizio have agreed to a deal it raises may questions for Roku. How much support will Walmart throw to Roku if the retail giant wants to grow Vizio into a major competitor in the world of streaming?

A spokesman for Roku wasn’t immediately available for comment.

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