Free TVs, With a Catch

Startup Telly offers 55-inch displays for consumers in exchange for their data — and a second screen that shows ads

Is America ready for the free, ad-supported TV set? Ilya Pozin, the co-founder of Pluto TV (the free, adsupported streaming service with 80 million monthly users now owned by Paramount), sure thinks so. On

May 15, Pozin unveiled Telly, a company that plans to ultimately give away millions of premium TV sets for free (its reservation system opened with a batch of 500,000 sets). “Companies are making billions of dollars from ads served on televisions, yet consumers have historically had to pay for both the TV and the content they watch,” Pozin says. Details on the amount of financing raised for Telly are not public, though the latest round was co-led by LightShed Ventures partner Rich Greenfield, also known for being a high-profile Wall Street media analyst.

In a faux living room setup at Telly’s New York office in May, Pozin gave a tour of the device, with a 55-inch 4K HDR screen up top and a second smart screen directly below it that always runs ads, as well as a moving news ticker and widgets for weather and sports scores. The Telly TV set is not a cheap discount-store device: Pozin says that if it were to be sold at a similar markup to other TV sets, it would retail for more than $1,000.

A free TV, supported by ads and data, has been a long time coming, with many marketers predicting it as “inevitable” years ago. Already, smart TV devices like Roku, Amazon Fire and Google Chromecast have brought their prices down close to zero, seeking to monetize through ads and data over time. The price of TVs has been on a steady decline as well, as device makers sell viewer data and deliver ads to their own operating systems.

But there’s a catch for Telly. “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,” Pozin says. “We know what your favorite brands are, we know what your favorite sports teams are, so when you first bring your TV home, you scan a QR code with your phone, all the data is already there.”

Pozin says that marketers are already on board, with plans to unveil more details at the Cannes Lion festival in June. The Telly founder adds, “All of them are super excited, and we’re in partnerships with all the big agencies.”