American TV manufacturer Vizio is being sold to Chinese company LeEco in a $2 Billion deal that will make Vizio a wholly owned subsidiary.
The announcement came at an event held today in Los Angeles where William Wang, Founder, CEO, and Chairman of Vizio, delivered a surprisingly emotional address. “This is the modern story of how David took on Goliath,” said Wang as he reviewed the history of the company he mortgaged his home to create. “As the father and founder of Vizio, I have mixed feelings about this, but for our shareholders and employees, I know this is the right thing to do.”
Winston Cheng, Senior Vice President, LeEco, explained the workings of the deal in detail, assuring that LeEco will retain all employees at Vizio.
For those not familiar with LeEco — formally LeTV — the company was founded in 2004 and has grown to be one of the largest online video companies in China. LeEco was the first streaming company to go public in China, and is often referred to here in the U.S. as the “Netflix of China.” The company currently offers more than 100,000 TV episodes and over 5,000 films, streams live TV channels, offers exclusive sports content, and produces its own original content. For example, the company produced Go Princess Go, a TV show that has managed to rack up over 3 billion views. The company is opening studio offices in Moscow and Mumbai, with its eye on several other locations in a bid to become the most powerful content creator in the world.
In addition to its work in TV and entertainment, LeEco also makes phones, has an e-commerce business called LeMall (think Chinese Amazon), and is developing a fully autonomous vehicle platform.
With its acquisition of Vizio’s hardware and software divisions, LeEco has broken into the U.S., and it is doing so in a very big way. In many regards, Vizio will be a sort of trojan horse into U.S. homes, and it is difficult not to see this move as a threat to the likes of Netflix, Amazon, and other popular streaming services.
LeEco isn’t painting it that way, however. Digital Trends spoke to Winston Cheng and he said they want to invite content providers into their platform. When asked if that meant there might be a Netflix or Disney app on a LeEco-powered TV or smartphone, Cheng indicated his company has different ideas up its sleeve. “We don’t really look at the world being an app world,” Cheng said. “For us we really want to go beyond the next stage of apps. On our phone, for example, there’s a desktop viewing capability where you swipe one time on the app rather than going into an individual app, and you’re already on an online video screen that you can make different kinds of pre-sets for, or search for content.”
That platform won’t be taking over Vizio TVs the way some may have thought; at least not right away. Matt McRae, Vizio’s Chief Technology officer, told Digital Trends the SmartCast platform it developed using Google’s Cast technology isn’t going anywhere anytime soon. “We are looking at ways to … pull in ecosystem components, whether its the content that Winston’s talking about or ways to interface into our system over time,” McRae said, “but our strategy and our brand is going to continue for the foreseeable future.”
So it would seem LeEco’s plans for global content domination and deep penetration into U.S. homes won’t be an overnight process. In fact, it will take many, many years. But the company is trying something none other has before it, and if it is tenacious enough, LeEco might just make it work.