They get money from the ads, they get money from selling your usage data, they get money by selling space on the remote for streaming apps, and probably through some other means as well.
Yeah, I thought $3000 sounded silly, and my only mistake was that I thought it was one order of magnitude silly when in fact it was two orders of magnitude silly.
That number is specifically for their SmartCast subscriber service. It's not clear what the rate is, but they subsequently talk about Roku making $40/mo; so it's possible that's the monthly rate. Assuming it is monthly, a television lasts for five years, and that is their only other source of revenue from the televisions, that's ~$1200.
The telling part of the article:
> ...[Vizio's] Platform Plus segment that includes advertising and viewer data had a gross profit of $57.3 million. That’s more than twice the amount of profit it made selling devices like TVs, which was $25.6 million, despite those device sales pulling in considerably more revenue.
If those are actually monthly figures you might be right, but I'm still not convinced that they are. $40/mo sounds implausibly high to me. Even if Roku, in a non-monopolized space, managed to swing a hefty 30% cut, that would mean an average of $120 spent on streaming services per month.
Are sports channels really expensive? Is that what I'm missing?
Most of the ad money comes from WatchFree Plus app on the tv.
"Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its WatchFree Plus package of streaming channels, a group that recently expanded with content targeting. The next biggest contributor is the money it makes selling Inscape data about what people are watching."
your argument requires that advertising is cost effective for the advertiser.
what if therre was a competing ecosystem, in which advertisers pushed up prices overall in a bid to out-compete each other? essentially, the cost of advertisments is added to the cost of consumer and all other goods. advertising increases cosumer costs, and decreases consumer choice.
