Telly, the company founded by Pluto TV’s co-founder Ilya Posin, announced on Monday that it would give away 500,000 55″ 4K TVs for free as part of its business model, which has advertisers pay the bill for consumers’ entertainment upgrades.
Telly has developed a dual-screen, smart TV at this model’s heart. It’s been in development for over two years. The 55-inch HDR Home Theater TV Display is divided by a 5-driver soundbar from the smaller bright screen. The smart screen shows weather, sports scores, and news. It also displays advertising in a dedicated section on the right of the screen.
The hardware also supports video calls, video games, a voice assistant with AI, music services, and motion-tracking workout programs.
Pozin said in a press release that “Telly” is the greatest innovation in television since color. “Telly represents a major step forward for consumers and advertisers.”
“For too long,” said he. The consumer needs to be treated equally in the exchange of advertising value. “Companies make billions from advertising on TV, but consumers have to pay for the TV and content they watch.”
He added, “All that has changed today.” “When I founded Pluto TV, my co-founders and I created a new model that offered viewers amazing free TV content. Telly allows us to offer the television itself for free.
Consumer Trade-off
Telly, the streaming company’s advertising platform, will allow them to afford the content they want and need, said Elizabeth Parks, President, and CMO at Parks Associates in Addison. The firm specializes in consumer technology and market research.
She told TechNewsWorld that “we project the number of households using advertising-supported streaming services to grow from 37 million households in 2020 to 52 million in 2027. This is a compound growth rate of 6.7% per year.”
Pozin estimates TVs with Telly specs and features are selling at US$1,000. However, 4K TVs sell for less. Brett Sappington is the vice president of Interpretation and a global consumer insight agency. He said that Telly would appeal to households with limited budgets but open to advertising.
He told TechNewsWorld that users could buy a 55-inch 4k smart TV for between $300 and $400 at an entry-level level. Users will have to decide whether they want an upgraded TV or constant advertising.
Mark N. Vena is the president and principal analyst of SmartTech Research in San Jose.
This could appeal to many users who are willing to commit since the TV is a model 55-inch HDR, with a value of $600.
‘Huge Leap Forward
Richard Greenfield is the general partner of LightShed Ventures. The firm co-led the latest funding round for Telly. He called Telly a “huge leap forward” that leverages the explosive growth in the connected TV advertising market and the consumer desire for more control and interaction that doesn’t disrupt TV viewing.
The dual-screen design allows advertisers to reimagine living room experiences while giving consumers an amazing TV for the low price of free.
Parks said that the free content supported by ads could be the next differentiation point between streaming services, their hardware platform partners, and other streaming services.
She said, “We anticipate that this will also pave the way for an interactive TV-based advertising experience as well as a commerce experience.” Our data shows that 50% of U.S. internet households worry that commerce will interrupt their TV programs. “Moving ads to a secondary screen could enable more commerce opportunities.”
In New York City, Ross Rubin is the principal analyst at Reticle, a consumer tech advisory firm.
He told TechNewsWorld that “they send you to a specific destination or allow you to scan a QR Code to send information directly to your mobile phone.” “Telly could open up new opportunities that were not mature in the past.”
Rob Enderle is president and principal analyst at the Enderle Group in Bend, Ore. He cautions that advertisers must be sensitive to their audience’s sensibilities. He told TechNewsWorld that the ads should be something users enjoy seeing. If they don’t like them, then they will find creative ways to avoid them.
He added, “People do not like ads.” “Putting them on dedicated screens alone won’t solve that.” You should also focus on the advertising content and see if there is a way to make it less disruptive for the content that the user is watching.
Volume Issue
Sappington said that although consumers enjoy freebies, they may hold them in different regard than things they have paid for. He said that some consumers would throw their Telly away if they do not like it or are tired of the advertisements. Others may make quick money by reselling the Telly on Facebook Marketplace or somewhere else.
He said that giving away hardware to make money was not new. Mobile carriers, for example, have given away low-end smartphones to make money from mobile data plans.
He continued, “The key to making it profitable is to be able to generate enough revenue on a regular basis.” “Ad-supported TV is a new concept. Companies have been competing for years to control the entire screen.
Parks were in agreement. She said, “This is a brand new model.” “Ad revenue is an important part of the revenue mix for smart TV and streaming player manufacturers, but business models require device purchases.”
Rubin remembered a company called Free PC from the late 1990s that advertised around the perimeter of a computer’s screen to try and subsidize the computers.
He said that the issue was volume. They couldn’t reach enough people to generate enough revenue from advertising to make their business viable.
He continued, “That will be another of the greatest challenges.” The demand side will not be an issue. “Plenty of people are always willing to risk their money on something free.”
He said, “The supply-side question is the one that matters.” “Can they convince advertisers of the quality of the audience knowledge they have to attract the investment needed to sustain their business model?”