Telly’s 'Free' TV Really Isn't as Good a Deal as It Seems—Here's Why

Telly will give you a 55-inch TV set for $0 (yes, FREE), but it might end up being the most expensive gadget you ever own. 

Ilya Pozin, co-founder of free ad-supported streaming television service Pluto TV, will give you a Telly TV for free. The catch is that the TV has a second screen that shows ads, widgets, and a news ticker the entire time you are trying to watch shows on the main screen. And like any modern TV, it comes loaded with a camera and a microphone array, plus a motion sensor that can turn the TV—and the ads—on whenever you enter the room. 

"In general, people should be aware of the drawbacks associated with a 'free' TV set before they sign up for one. They should ensure that they understand the data collection and analytical practices of the company providing the free TV. If the user is not comfortable with this information and practices, they should not accept the offer of a free TV set and should instead seek other alternatives," IT consultant Michael Collins told Lifewire via email. 

The 55-Inch Telly

On the one hand, a 55-inch TV with a built-in sound bar and a second screen for showing extras doesn't sound so bad. You will, says the product blurb, be able to make video calls on this Smart Screen, see sports updates, weather, and more. Plus, some TV channels already pepper the screen with promos and other announcements in the middle of the show. 

And plenty of people agree. The company will ship 500,000 TV sets beginning this summer, and within just 36 hours of its launch, 100,000 people had registered to get one. According to founder Pozin, two-thirds of those signups are from Gen-Z and millennials, which means they either can't afford a TV otherwise, appreciate a bargain, or don't value their privacy at all—or all three. 

Freely Giving Your Privacy Away

In 2019, TV maker Vizio went public, and as a publicly-traded company, it revealed a lot about its inner workings. For example, it made almost as much money from advertising as it did from selling the TVs, according to Business Insider. And those figures are from its first financial report in 2020. 

Let's think about that for a second longer. Vizio is a TV and sound bar manufacturer, not an advertising company. And yet it makes almost half of its money from ads. One has to assume other TV makers have similar splits, and it's not hard to see a business model where the ad revenue completely absorbs the cost of making the TV. 

Compared to the old ways of tracking TV viewing patterns, like paper diaries or a box that hooked up to the TV and required its film roll (yes, film) to be mailed to Nielsen once a week, a modern TV sprays out a firehose of personal data, from what and when you watch, to which ads you pay attention to. According to the Business Insider story, some manufacturers sell this data to third parties.

And if you have any doubts about the huge value of this data, the proof is right here. It's so valuable it's worth designing and giving away a custom TV just to get it. And Telly is also serving ads based on your profile:

"During the signup process, we ask questions about you and your household to optimize your ad experience. Brands, in turn, pay for the non-intrusive ad on the Smart Screen. That's how you get Telly free. Plain and simple," says the Telly product page. In 2015, Samsung got into hot water because its TVs were eavesdropping on owners using their built-in microphones. Samsung's privacy policy stated that you should "be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party through your use of Voice Recognition."

Two years later, a Wikileaks leaked documents showing that the CIA had developed what it called the Weeping Angel attack, which could remotely hack into Samsung TV mics. 

And yet, despite these established privacy invasions, people still love free TVs, apparently. We will be interested to see if Telly manages to turn this into a sustainable business, but given the numbers we saw earlier from Vizio, it looks like a real moneyspinner.