William Wang: Yes, sure. The TV market thing up and down for many years. And I think in the beginning, the years, definitely over supply of components that dropped down the price quite a bit. And that situation eased out quite a bit. And I think the component manufacturer, they are more careful with the pricing because the lower prices, the more they’re going to lose. They don’t want to do that anymore. Again, 12 months ago, there was a third class, the inventory. So maybe a lot of irrational pricing decisions, but now that’s kind of disappeared. But I think in the coming years, the price will be driven by not just components, inventory pressure, but I think that gone away. I think it’s really a competition between the CTV system where people are fighting for CTV market share. So that’s yet to — that’s been out there for years now. I think that will continue. But the component pressure on surplus inventory eased out quite a bit the past few months. Adam?
Adam Townsend: Yes, look on one for margins. Sure. I think over time, as this plays out, you could imagine that we would get margin back in to device. But again, to our earlier points and the value of our install base and the growing value as we execute against the significant upside we have for ARPU, just from a customer lifetime value standpoint, it continues to make sense to deploy the strategy that we’re working on right now. So we’re going to continue to be focused on that.
Michael O’Donnell: Yes, Tom, on your question on VIZIO account, not too much data points to add beyond Adam. So I think you shared 40% of the S.BOT, T.BOT base as integrated, over 200% increase in terms of subscriber growth over last year. But one of the things we’ve done is we just recently held our developer conference, this last quarter, and it’s critically important for us to continue to grow our relationships with the developers on our platform. And VIZIO account is one way we’re continuing to do that. We think it creates opportunities for them to drive more subscribers to get closer to our customer base. But we also leveraged it to help and we had over 200 attendees speak to them about other ways in which we can help them monetize, ways we can do that through advertising.
And then also some of the unique tools we have put in place around interactivity around our enhancements to our mobile platform, enhancements to our home screen, and which we can help them drive more innovation. So VIZIO account is one component that will help us continue to grow monetization. But I think it’s also an important component that helps us integrate more deeply with the app partners on our platform and show them that we have a lot of capabilities for today and for the future.
Tom Champion: Thank you guys.
Michael Marks: Thanks Tom. Operator, we have time for one more question.
Operator: We will take our final question from Tom Champion with Barrington. Please proceed. We’ll take our final question from Jim Goss from Barrington.
Jim Goss: All right. Thank you.
William Wang: Hi, Jim
Jim Goss: Hi. I was wondering first, the comment about the higher monetization of the larger sets. I was wondering if you could talk about the mix of drivers of that higher lifetime value. Was it the increased usage only or were there differences in the ad exposure and the monetization events that were taking place?
Adam Townsend: Look, I think it’s sort of both. It’s the way that they use the unit. If you could imagine, let’s just use a 65-inch again as an example. That’s going to be the main TV in the home. That’s really going to be watching most of their lean back, long form content. They’re going to be highly engaged with streaming services and engaging in a way that we have an opportunity to monetize that interaction. Not only in the home screen, but obviously across a variety of third party apps, and then hopefully they’re spending a growing amount of time in our WatchFree+ as we continue to build out and expand what that service offers. Contrasting that to a smaller unit where maybe over time it becomes a TV in the bedroom. It’s not used as frequently.
Maybe it’s a monitor. A lot of different use cases can span across the various sizes. As we understand that data more and more, and we understand the lifetime value, we understand how long a particular TV stays active in our fleet. It really helps drive and inform us around decisions on pricing, on retail relationships, because ultimately it’s really about having an opportunity to expand monetization.
Jim Goss: Do you get a combined effect if you have multiple VIZIO TV households? Or do you treat them separately?
Adam Townsend: It’s really a device metric. It all gets blended into our average reported statistics. So if a household has a 24-inch in one room and a 65-inch in the other room, and they use them differently, that will show up on a blended basis in our overall reporting statistics.
Jim Goss: Okay, and one other quick thing is the VIZIO branded content studio. You have one of your slides that addresses that. I wonder if you could talk about the potential importance of it to what you’re planning to do with that?
Michael O’Donnell: Yes, Jim. It’s Mike. I’ll take that. So from a home screen perspective, we’ve been looking at a lot of ways in which we can expand our advertiser base beyond media and entertainment. And I think we’ve done a really good job, whether that be with promotion of certain content we have within our platform, whether that be sponsorships of custom curated collections or channels, as well as branded content. It’s all ways in which we can bring a new fleet of advertisers into the home screen or monetize them beyond video or household connect. So, branded content studio has been a great addition for us to our advertising offering. Our TV data helps us understand what our consumers like to watch. So the branded content initiative helps us pair advertisers with content that’s produced for their tastes.
I think you see we just rolled out this past week our latest installment, it’s called Merry & Bright, a holiday decorating show brought with Jordan Sparks, and it’s brought to you by Home Depot. We think branded content studio is great because it gives our consumers exclusive original content. It’s great for the advertiser because our users are guaranteed to see the home screen when they turn the TV on. So it’ll provide great branding for them, as well as integrations directly into the content itself. With Home Depot, not only are they integrated into content, but we also have QR codes. So we’re able to create a shoppable experience as well. And then when you tie it all together from an economic standpoint, all the investment that we’re making in this original content is covered by the partnerships.
So we think it’s a great way to continue to grow our relationships with non-median entertainment partners integrated into the home screen.
Jim Goss: Okay, thanks much.
William Wang: Thanks Jim.
Michael O’Donnell: Thanks Jim. And thanks everyone for joining. This concludes today’s call. Have a great evening.
