Tele, a company started by Pluto TV co-founder Ilya Pozin, announced Monday that it is offering 500,000 55-inch 4K TVs to the public for free, as part of a business model that In which advertisers have picked up the tab to upgrade the consumer’s entertainment.

At the heart of the model, which has been in the works for two years, is a dual-screen Smart TV developed by Tele. The One Screen is a 55-inch 4K HDR home theater television display, divided by a five-driver sound bar from the smaller Smart Screen. The Smart Screen displays information such as news, sports scores and weather, as well as advertisements, which are displayed continuously in a dedicated area on the right side of the Smart Screen.

In addition to TV programming, the hardware supports video calling, video games, AI-enabled voice assistants, music services, and motion-tracking fitness programs.

“Television is the greatest innovation in television since color,” Pozin said in a statement. “Tele is a revolutionary step for both consumers and advertisers.”

“For a long time,” she continued. “Consumers have not been equal parts of the advertising value exchange. Companies are earning billions of dollars from advertisements served on television, yet consumers have historically had to pay for both TV and the content they watch.

“That all changes today,” he said. “When I co-founded Pluto TV, we created an entirely new model that offered viewers amazing TV content for free. Now, with Telly, we are providing real television for free as well.”

consumer business

‘Tele will help streaming companies afford the content they need and want through an always-on advertising experience,’ said Elizabeth Parks, president and CEO of Parks Associates, a market research and consulting company in Edison, Texas.

“We forecast that the number of households using ad-supported streaming services will grow from approximately 37 million households in 2022 to 52 million in 2027, a compound annual growth rate of 6.7%,” he told TechNewsWorld.

Pozin estimates that TVs with the Tele’s specifications and capabilities are selling for US$1,000, although 4K TVs are selling for less. “Tele will be interesting for households that have limited budgets but are open to advertising,” said Brett Sappington, vice president at Interpret, a global consumer insights agency.

“Currently, users can buy an entry-level 55-inch, 4k smart TV for $300 to $400,” he told TechNewsWorld. “So, users will be considering the tradeoff of always-on advertising versus an advanced TV.”

Mark N., president and principal analyst at SmartTech Research in San Jose, Calif. “Tele is one of the more intriguing attempts to address the market of users who are willing to trade up their data in exchange for free TV,” Vena said. ,

“It could be attractive to a non-trivial number of users willing to make that commitment, as the TV is a 55-inch HDR model, priced at $600.”

‘Giant Leap Forward’

Richard Greenfield, general partner at Lightshade Ventures, the firm that co-led Tele’s latest funding round, calls Tele “a giant leap forward, taking advantage of the explosion of the connected TV advertising market and consumers’ desire for more control and interactivity.” does not”. Disrupt the TV watching experience.

“The unprecedented dual-screen design enables advertisers to completely re-imagine the living room experience, while offering consumers an incredible TV at an easy-to-use-yes-free price,” he said in a statement. “

Tele Smart Screen displays news, sports scores and advertisements

The tele smart screen displays information such as news, sports scores and weather updates, as well as advertisements running in a dedicated area on its right. (Image credit: Telly)

Parks said free ad-supported content is potentially the next point of difference between streaming services and their hardware platform partners.

“We expect this will also pave the way for more interactive advertising experiences and TV-based commerce experiences,” she said. “Our data shows that 50% of US Internet households are concerned that T-commerce will disrupt the programs they are watching. Moving ads to another screen may provide more T-commerce opportunities.”

Increasingly, streaming providers are tapping into interactive ads, said Ross Rubin, principal analyst at Reticle Research, a consumer technology advisory firm in New York City.

“They send you to a destination or let you scan a QR code to send information to your cell phone,” he told TechNewsWorld. “Tele may open up some new opportunities that weren’t ripe in the past.”

Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm in Bend, Ore., however, cautions that advertisers need to be in sync with their audience’s sensibilities. “Ads will need to be something users don’t mind seeing,” he told TechNewsWorld. “Otherwise, they are likely to be creative in finding ways not to see it.”

“People don’t like advertising,” he said. “Just putting them on a dedicated screen doesn’t fix it. You also need to look at the ad content to see if you can come up with a format that doesn’t detract from the content the user is viewing.” Not there.

volume issue

Sappington explained that consumers like free things, but their commitment to them may not be as strong as they are to things they pay for. “Some consumers can simply exit their tel if they don’t like it or get tired of the commercials,” he added. “Others may try to make a quick buck by reselling it on Facebook Marketplace or elsewhere.”

He said that giving away hardware to make money is not a new thing. For example, mobile carriers have given away cheap smartphones in order to take advantage of mobile data plans.

“The key is being able to generate enough ongoing revenue to make it profitable,” he continued. “That said, an ad-supported television is certainly new. Controlling the entire screen is a powerful position that companies have been competing to win for years.”

Park agreed. “It’s definitely a new model,” she said. “Advertising revenue is a significant part of the revenue mix of smart TV and streaming media player makers, but the business model has so far required in-device purchases.”

Rubin recalled a company in the late 1990s called Free PC that tried to subsidize free computers with advertising along the perimeter of the computer’s display.

He said, ‘The issue has become big. “They couldn’t reach enough audiences to attract enough advertising revenue to make the business viable.”

“It’s going to be one of the biggest challenges here as well,” he continued. “Demand side will not be an issue. There are a lot of people willing to take a chance on something that is free.”

“The question is on the supply side,” he said. “Can they make a convincing case for advertisers about the quality of their audience knowledge being the kind of investment they need to sustain the business model?”

Consumers can reserve free TV on the Tele website.