Want a free 55-inch TV? The catch: Nonstop ads, less privacy

New York (CNN) — Meet Telly, the startup company looking to give away free 55-inch televisions. There’s a catch: a second screen attached to the bottom streams non-stop information and advertising based on the household’s extensive personal data.

The TVs, subsidized by those ads on the second screen, will begin shipping out to the customers on its waitlist this summer. Telly has opened sign-ups for the first 500,000 of its Dual Screen Smart TVs, a 55-inch display with a second smart screen integrated through a soundbar.

As with most TV monitors, cable and streaming channels are not included. Nonetheless, Telly reports “overwhelming” demand.

“We are putting an end to the decades-long practice of double-dipping on the consumer, where the consumer is being charged for the television and then have the TV manufacturer turn around and make billions of dollars off of selling the advertising and data from that television without providing the consumer any value,” Telly chief strategy officer Dallas Lawrence told CNN. “We believe that the consumer should share that value proposition.”

Telly is relying on a second source of revenue on top of ads: data. “You’re giving us your demographics, your psychographics at the individual and household level before you even get your device, so we know who you are, we know where you live, we know your income, we know what car you’re driving, we know when your lease is up,” Ilya Pozin, founder and CEO of Telly, told the Hollywood Reporter Monday.

“Similar to other TV makers, we have viewing data, but we also have audience data now at the individual household. When you merge those two things together, the targeting is literally one-to-one.”

According to the company’s privacy policy, anonymized collected data includes contact information, cultural or social identifiers like favored sports teams, IP address, gender, political opinions, and sexual orientation. (After the publication of this article, Telly said the question of sexual orientation has been removed from its privacy policy and that it has not been asked of any customers.)

Some data comes from a survey users fill out on preferences and lifestyle choices to maximize ad personalization, like showering users with restaurant ads and offering coupons to those who say they eat out a lot.

While the extensive data collection may come as a surprise, Telly argues that smart TVs are already doing just that with less transparency–and no free television.

“The reality here is the only difference between the data we collect and what every other TV manufacturer collects today is that we asked the consumer upfront to share it, and then we give them a $1,000 TV for free in exchange,” said Lawrence.

On top of a square for advertisements, the smart screen displays information including news, sports scores, weather and stocks.

Telly also offers AI-powered recommendations for content streaming, Zoom-powered video calling (with a privacy shutter), video games, motion-tracking fitness programs and a “Hey Telly” voice assistant. Updates to the system will be frequent, according to Lawrence.

Though it ships with a 4K Android TV streaming stick, the technology is compatible with other major streaming devices like the Amazon Fire Stick or Apple TV.

Telly will also collect data on TV consumption, using a sensor to assess how many people are watching from the couch. This anonymized data is intended to help media companies have a better understanding of viewership numbers and demographics.

Before launching Telly in 2021, Pozin co-founded Pluto TV, a free ad-supported streaming service purchased by Viacom in 2019 for $340 million.

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