And Vizio has faced countless class-action lawsuits, alleging violations of the federal Video Privacy Protection Act. Namely, that Vizio turned its Smart Interactivity feature on by default, collected and resold television viewership data to third party companies without an explicit opt in from the consumer up front.
(Competitors like Samsung and LG, by contrast, required a user to opt in before collecting that information).
“The main issue the marketplace has with Vizio’s business model is it treats data as a product, but it doesn’t really create any consumer awareness for its primary profit stream,” said Ashwin Navin, CEO of Samba TV. “Buyers look at that and think, ‘How well are you really aligned with the people who consume your product?’”
After Vizio tried and failed to IPO last summer, seeking an acquirer that would give it “supply-chain advantages” in the television ecosystem became a logical next step.
“Vizio got a good price for their TV business and it saved them from waiting for a lukewarm IPO market to open up,” said Dave Morgan, the CEO of Simulmedia. “They get a chance to create independent value in the data services business, which I believe has the potential to be a very big business.”
It’s not an easy environment for a television manufacturer.
“If there isn’t a sophisticated internal strategy, one that builds a continuous, always-on relationship with the consumer that traverses all their devices like Apple or a platform like Google, I think you’re in deep trouble,” Navin said.
In addition to “intelligent hardware,” LeEco claims it offers a litany of connected products enabling the delivery of content and powering applications cross-screen, giving Vizio more runway and development resources.
LeEco, Vizio and the FTC did not respond to requests for comment.