Telly Will Live Or Die On The Buzz, Upfronts Offer Few Surprises

May 19, 2023 Alan Wolk

1. Telly Will Live Or Die On The Buzz

True Story: About five or six years ago a well known investigative reporter from a major national newspaper got in touch with me because they were doing a story about the nefarious ways that smart TVs were tracking consumer behavior. We had just come out with a report about smart TV advertising and did I have a POV?

I did, but it was not the POV the reporter wanted to hear.

I, and it seems pretty much everyone else interviewed for the piece, said that while consumers are indeed concerned about privacy, they were much less concerned about privacy around TV.

Most figured that Google was tracking everything they did online from banking to porn and Amazon was tracking everything they bought, so what did it matter if Samsung, LG or VIZIO knew they were fans of Modern Family and Family Guy reruns.

Many thought the tracking could help save their favorite shows from cancellation and some even noted that it could help with what to watch style recommendations.

So no, it was not a big deal.

I’m telling you this as a preamble to the real story which is the launch of Telly, the Rich Greenfield/Gary Vee-funded startup from Pluto co-founder Ilya Pozin.

Because the idea behind Telly is that its TV will indeed track your behavior and serve you ads. Which is why they’ll give you a 55-inch HDTV for free.

That is what everyone in the industry seemed to be talking about this week. Far more than the upfronts or the writers strike.

And I’ll tell you what I told them: Telly is a product that will live or die on the direction of the buzz it generates.

Here’s why.

Why It Matters

There are two ways to tell Telly’s story.

The first is the one the company is pushing, which is that this is the first time consumers can actually benefit from all the data that companies are already collecting about them, and this isn’t some cheap tchotchke, it’s a high-end TV.

Telly is claiming the TV is a $1,000 value, CNET puts it at closer to $400— $300 for the TV and $100 for the soundbar.

The second is the way the reporter in the opening anecdote wanted to spin it—Telly wants to give you a free TV, but in exchange. it is going to be tracking you in ways you might not have realized.

The tech and TV trade press have weighed in, but it really doesn’t matter what they think. If Telly is going to survive it needs mainstream and consumer media to give it positive buzz.

Right now, that’s seeming like an uphill battle.

To begin with, Telly gave up an unforced error to Team Privacy when a freelance investigative tech reporter named Shoshana Wodinsky uncovered a prematurely posted version of Telly’s privacy policy that seemed to indicate that perhaps the company did not actually value the privacy rights of those under 13. (The company has since offered an explanation and reaffirmation of their commitment to those privacy rights, but the genie has left the bottle and he’s not getting back in.)

There’s also the headlines in a number of consumer-facing tech publications:

(And in case you were wondering, the Wired piece ends with this: There may be no immediate harm to people who get free Telly TVs, he says, but there’s a chance that such technology further normalizes dangerous levels of surveillance.)

So there’s that, but on the other hand, this is not a new idea.

I have been having discussions around the wisdom of offering consumers some sort of monetary value in exchange for their data for many years. Granted, these discussions were centered around content owners, e.g., the idea that one of the streaming services would allow consumers to trade greater access to their viewing behavior in return for a reduced subscription price, but the basic argument was always the same one that Pozin and team are making: consumers are already giving up their viewing data for free, so why not get some sort of value out of it, even if it means voluntarily giving up more of it?

Which, of course, is exactly what Telly is asking them to do—fill out a whole questionnaire about who they are, what they like, who they date, etc.

So there’s that, but there are a number of additional issues that Telly will have to deal with.

Price: Free is free, but a little Googling revealed that you can buy a brand new 55-inch 4K TV on sale at BestBuy for just $89.99. It may be last year’s model, but it’s got over 2,300 mostly positive reviews on the BestBuy site, which is not nothing. Meaning that people who want a low-priced TV have other options.

Socioeconomics: There will be an assumption that this TV is mostly aimed at the poorest among us and that raises a host of issues from the ethics of asking them to trade their privacy rights in exchange for a TV set to the actual value to advertisers of that sort of audience. (I could make a counterargument that low income audiences are indeed hard to reach on streaming and are actually quite valuable.)

The Spare Room Issue: A second potential audience is more affluent consumers who read publications like Wired and TechCrunch and figure they could use a free TV to put in the guest room where it may only get watched once or twice a year, thus negating any potential value for advertisers. Telly could ensure that their TV is the main TV in the house, but that would seem to severely limit the potential audience. My main TV, for instance, is about six months old and larger than 55 inches. There’s zero incentive for me to give that up.

The No UI Issue: While Telly is able to execute voice commands, it does not come with any preinstalled streaming services, not even FASTs. (Games and music apps, but no TV apps just yet.) The company will supply users with Android dongles and the TV works with Roku, FireTV and AppleTV.

That’s not necessarily a bad thing, but given that consumers have started to get used to relying on the interface on their new smart TVs, going back to dongles may seem like a step backwards

What You Need To Do About It

If you’re Telly, you need to get ahead of the buzz cycle. Like aggressively get ahead of it, with strong marketing and PR campaigns.

It doesn’t really matter what TechCrunch and Wired have to say about your product. It does matter what the New York Times, Consumer Reports and TikTok influencers have to say about it.

If you want to win, you need to get out there with that message about consumers finally being able to trade their data for something of value.

You will also need to understand that consumers don’t like to admit to themselves how much data they actually give up. And that the sorts of reporters who cover tech are going to focus on Big Tech Doing Bad Things With Your Data type spins because that is what will get them fist bumps from their pals on BlueSky.

And making that second screen seem like a cool addition to the overall viewing experience wouldn’t hurt either. Because it’s easy for consumers to see it as punitive.

Mostly though, you are waging a battle for hearts and minds. You can be the taking-control-of-your-data device. Or you can be the creepy guys that give you a free TV so they can track everything you do, a sort of post-1984 nightmare.

And in today’s charged climate, it’s all too easy to wind up being the latter.

If you are a subscription streaming service, trading data for reduced subscription prices may still make a lot of sense for you—you can sell it as a recommendations play. So watch what Telly is doing and learn from it as those lessons may come in handy. Even more so in that a reduced subscription price may seem less invasive than a free TV set.

If you’re a TV OEM, this is also a learning opportunity. Chances are you will want to roll out a free TV of your own soon enough too, and understanding what people respond to and what turns them off will be valuable intel.

Freebie for everyone: Telly may struggle with U.S. consumers, but the platform would seem to be custom-built for emerging economies, places like India, Brazil and Kenya, where even $90 is a lot of money for most people to pay for a TV and there is a long history of watching ad-heavy programming in exchange for free access.

2. Upfronts Offer Few Surprises

Thus far, the Upfronts have been light on big news items.

This is not surprising—they rarely are, and 2023 is definitely a transition year for the industry.

Fear of a recession and the writer’s strike (along with pickets in front of the actual upfronts) helped keep things quiet too, but the real takeaway is just what you’d expect it to be—a slight quickening of the transition to streaming.

Here are the highlights thus far:

Why It Matters

YouTube’s Non-Skippable Ads. Further proof that they really are trying to be “TV”. (They’ve also tapped iSpot to do their measurement. Just like a real TV network.)

What would help though is some data about what people are actually watching when they watch YouTube on TV. That would help advertisers frame the brand suitability issue.

You see there’s a debate raging about how much context matters in terms of production quality. As in, if a viewer is watching a low production value UGC show on their TV, and they are very engaged with it, is that impression equivalent to one that runs during a popular very high production show like The Crown?

On the one hand, they are both being watched on a big screen TV.

On the other, are viewers aware of the difference in production quality between them and does that awareness vary by age, gender or location? And if they do notice, where is the line—how low production value does the YouTube video need to be?

Having that data will help to better frame the argument.

Netflix has nearly 5 million ad-supported users. It’s still early days for ad-supported Netflix, and that number is global, not US, but it’s a start. Our TVREV theory, if you recall, is that at some point before the end of the decade, we will have critical mass on the ad-supported subscription services, at which point major advertisers will look at those numbers and their ability to run ads against high quality original programming and say “Okay, I get it. SVOD is the new prime time and FASTs are the new cable. Great. Take all our money streaming TV.”

Until then though, we will have to deal with a hybrid linear/streaming ecosystem and all that entails.

Final Point: One big plus of the shift to streaming, something Magnite CEO Michael Barrett pointed out during a panel I hosted at Luma’s DMS Summit, is that it allows many more advertisers to take advantage of TV. (And by “many more” we could be talking a couple of thousand, whereas the number of linear TV advertisers was in the hundreds.) That should help a streaming-based TV industry make up for some of those lost carriage and retrans fees.

What You Need To Do About It

Not much to do about anything right now other than sit back and enjoy the show. And hope that the writer’s strike ends soon, or we’ll be watching a whole lot of reality television.

Or YouTube.