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Vizio Settles Lawsuit With Incentive to Watch More TV

The $2.3 million settlement Irvine-based Vizio Inc. recently reached to stave off a proposed class-action lawsuit regarding false advertising carried an interesting payment mechanism.

The consumer electronics brand under the deal reached in federal court in Santa Ana will provide about 330,000 consumers with a $4.99 credit on Amazon.com to buy or rent movies and TV shows, according to court documents. The settlement also includes about $520,000 in attorney and related legal costs.

Vizio declined to comment.

The original lawsuit, filed in April 2014 by Kirk Hinshaw in Superior Court in Santa Ana, alleged the company marketed and sold 2014 model TVs that advertised Amazon App accessibility, but knew as of Jan. 1 of that year that the app wasn’t functional, violating the California Consumer Legal Remedies Act and California Business and Professions Code.

The software glitch was fixed in late June 2014.

Negotiations between Vizio and the plaintiff took 10 months to reach a settlement, court documents show.

Vizio is the U.S. leader in smart TV sales and is among the largest private and minority-owned companies in OC, with revenue of $3.5 billion last year.

The settlement comes as Vizio battles a separate class-action lawsuit filed by an Indiana man that contends the company monitored and tracked his viewing habits through his smart TV, unbeknownst to him, concealing the tracking software and the method for disabling it.

Vizio plans to “aggressively defend” the suit, a company spokesman told the Business Journal in March.

It remains to be seen if the legal challenges will affect investor sentiment, as the company last year filed plans to raise up to $172.5 million in a very dry tech sector IPO market.

World of Swag

This column in March talked up the possibility of Blizzard Entertainment Inc. running a promotion for those who attend the upcoming “Warcraft” movie to also receive a free month of online game play for its franchise hit “World of Warcraft,” which inspired the big screen version.

Well, the Irvine-based video game maker tweaked the deal and will now give movie goers a free digital copy of the game valued at about $40.

The development comes as WoW subscriptions plummet. Players pay $15 a month to access the online fantasy role-playing game, a genre Blizzard helped popularize in 1994.

The company since late 2014 has lost more than 4.5 million subscribers. The last subscription figure released was 5.5 million through September 2015, before the video game publisher stopped disclosing figures.

The local unit developed the movie, scheduled for release on June 10, with Burbank-based Legendary Pictures LLC. Universal Pictures is the distributor.

Down South

Irvine-based IT provider Synoptek LLC has added an office in San Diego to serve the local healthcare, biotech and financial service industries, among others.

The company plans to double its employment in the region to about 30 with the addition of technicians, engineers, sales and business development personnel.

Synoptek has been one of the fastest growing private companies in Orange County. Tim Britt, former chief information officer for Ace Hardware Corp.’s online store, established it in 2001. The company posted revenue of $44.6 million in the 12 months through June.

Its $29 million February buy of Earthlink Holdings Corp.’s IT business in Atlanta will nearly double employment and revenue. The unit, which has about 1,700 customers and more than 200 workers, generates about $37 million in annual sales.

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