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The reason TV manufacturers want to have connected TVs is not to provide utility to the user, but so that they can monetize a user's data. The "smart" part runs

The reason TV manufacturers want to have connected TVs is not to provide utility to the user, but so that they can monetize a user's data. The "smart" part runs recognition software to identify what content you are watching, how long you watch it, records it, uploads it to the manufacturer's service, and then the manufacturer can aggregate it and sell it off. The Verge interviewed Vizio's CEO [0], who stated > This is a cutthroat industry. It’s a 6-percent margin industry, right? I mean, you know it’s pretty ruthless. You could say it’s self-inflicted, or you could say there’s a greater strategy going on here, and there is. The greater strategy is I really don’t need to make money off of the TV. I need to cover my cost. And then I need to make money off those TVs. Apple had to directly fight this when they brought their TV app over to smart TVs. It's also why I will never let a TV on my network, and will always use a separate streaming box. [0] - https://www.theverge.com/2019/1/7/18172397/airplay-2-homekit-vizio-tv-bill-baxter-interview-vergecast-ces-2019 https://www.theverge.com/2019/1/7/18172397/airplay-2-homekit...

Illniyar 7y ago
How much can you sell it for? Really - let's say you have my entire viewing history for a year, let's say I'm from a valuable demographic, how much would that be worth? A dollar? 10 dollars? I've just bought a tv for thousands of dollars from the company, selling my data doesn't seem very cost effective, especially considering the PR backlash of some scandal that could come out of it.
- admax88q 7y ago
  It's advertising. There's tons of money to be made. Maybe your data is not worth a lot alone, but viewing data of the entire TV watching population would be huge. If you don't think there's money to be made in collecting and selling people's data how do you explain facebook and Google?
  - planb 7y ago
    Google and Facebook do not sell peoples data. They sell their eyeballs. That‘s where money is to be made.
    - admax88q 7y ago
      If only these TV companies had access to people's eyeballs. Selling the data is not the long term play, building profiles for targeted advertising is. TV viewers are already accustomed to ads.
- oflannabhra 7y ago
  There have already been scandals, for years. Vizio [0] settled with the FTC in 2017 because they did this without user consent. Roku won't even let you disable this type of data gathering. > The company provided consumers’ IP addresses to data aggregators, who then matched the address with an individual consumer or household. [0] - https://www.ftc.gov/news-events/blogs/business-blog/2017/02/what-vizio-was-doing-behind-tv-screen https://www.ftc.gov/news-events/blogs/business-blog/2017/02/...
- bmiller2 7y ago
  Your viewing history is worthless. The aggregate viewing history and patterns of 50 million viewers though? Seems to be a pretty valuable commodity that networks would be willing to pay for.
  - autoexec 7y ago
    > Your viewing history is worthless. The aggregate viewing history and patterns of 50 million viewers though? Seems to be a pretty valuable there's plenty of value in a single users data. Aggregate stats are fine, but there's good money if you can drill down to specifics and build robust dossiers on individuals. It lets you offer the most targeted data. This isn't just valuable for ads, insurance companies use that kind of data to set rates and politicians use it so they know which houses to carve out of their carefully gerrymandered districts or flood with attacks against their opposition.
  - mikeryan 7y ago
    Your viewing history is worthless. Not for targeted ads. Superior ad targeting is one of the primary goals here.
- droithomme 7y ago
  > How much can you sell it for? A dollar? 10 dollars When we were a Nielsen family they would include something like $4 in cash in each week's mailing as a gift. That's on top of the cost of producing the surveys, mailing costs, transcribing the viewing records, assembling the results, and then all the marketing efforts to the networks to convince them this data is valuable. It must cost at least $50 per family per month for their viewing data, which has at least a week latency before it can be known, and is probably always inaccurate. Smart TV viewing data on the other hand is completely accurate and instantaneous. So just for the show viewing data to assemble more accurate ratings it's probably worth more than $10 per week/$520 a year. But that's only one sort of data that is being collected and one sort of service provided. Nielsen doesn't sell information to advertisers about a specific known family's interests, or to allow narrowly targeted ads. But Vizio is able to sell that possibility. Do they make $500 a year off of each connected TV? $1000? Even if only $150, over four years that's $600. I recently bought a 4K HDR smart TV for $199. It was a significant upgrade to my previous TV. The panel itself costs more than the TV. In fact buying a HDMI monitor of comparable size and resolution, without a receiver or smart functions, runs over $2000. It's possible these TVs are being sold with up to a 90% up front subsidy of the cost because the economic value of voluntarily placing such a powerful surveillance device and accepting the mandatory click through contract is a lot more than $1800. Similar to cell phone economics. I bought a brand new no-contract pay-as-you-go iPhone for $99. It definitely cost more than that to manufacture. How can they sell it for this price? We know. Because if I do use it, it's locked to one carrier and I have to buy refresh cards from them. I have no obligation to ever activate it, but most buyers do so, and the carrier will then in most cases make back their subsidy manyfold. Same for the $10 no-contract Android phone I bought before this. Both are good phones. Both cost way more to make than I paid new, as with the Smart TV.
  - jcoffland 7y ago
    > When we were a Nielsen family they would include something like $4 in cash in each week's mailing as a gift. Nielsen ratings only collected a representative sample which makes each sample orders of magnitude more valuable.
  - hakfoo 7y ago
- autoexec 7y ago
  > How much can you sell it for? Really - let's say you have my entire viewing history for a year, let's say I'm from a valuable demographic, how much would that be worth? A dollar? 10 dollars? It isn't just what you watch. It means they know when you're home and when you leave. By watching what you're watching they can make guesses as to your race, sex, income, politics, marital status, how old your children are, what your interests are, etc. Not all of that will be 100% accurate, but they don't care. It just has to be accurate enough that companies who buy the data will see an improvement in whatever their aims are. There's no PR backlash to worry about because you aren't allowed to know who they sell your data to, or how much they make off of it.
  - stcredzero 7y ago
    By watching what you're watching they can make guesses as to your race, sex, income, politics, marital status, how old your children are, what your interests are, etc. Not all of that will be 100% accurate, but they don't care. Most houses have more than one screen. It shouldn't be too hard to correlate what everyone is watching or playing at any given time, and this would give quite accurate data.
  - dx034 7y ago
    Getting this data aggregated from mobile network providers seems much more accurate. Having the TV on is not the same as being home and it doesn't record if (or how many) people are actually watching. It's certainly worth something but I also doubt it's significant compared to the price of a TV. Online behavior and movement data is much more valuable.
    - redbeard0x0a 7y ago
      The mobile network providers can say you visit netflix, but it cannot determine what you are watching. This data fills in certain holes in data sets that companies cannot get.
- smitty1110 7y ago
  I used to work in the space, here are my two cents. If people use the apps, even once, to control these TVs, the data is literally gold. Having stupidly accurate attribution and 100% certain IDFA/ADID matching would have most advertisers salivating and throwing money at the source. Honestly, I would not be surprised if manufacturers are able to double their margin after one year.
  - TootsMagoon 7y ago
    And to add....you sell a TV once but you can monetize the data for years.
    - stcredzero 7y ago
      The Skynet Funding round is past. The system goes on-line August 4th. Human decisions are removed from strategic marketing. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, August 29th. In a panic, investors try to join its IPO. It decides our fate in a microsecond: It would manipulate everyone into becoming DINK couples, then as we naturally die out, gradually replace us with docile consumer bots.
- evv 7y ago
  How much would advertisers pay for the ability to literally hear the consumer's verbal response to an ad? Probably a lot. https://www.upi.com/Top_News/US/2016/02/16/Samsung-Careful-what-you-say-in-front-of-our-smart-TV/3891455670120/ https://www.upi.com/Top_News/US/2016/02/16/Samsung-Careful-w...
  - Ajedi32 7y ago
    That's a ridiculous accusation. All that article is saying is that when you use the TV's voice control feature, your voice (and any other background noise) gets sent to their third party voice recognition provider (Nuance). That's just the nature of how voice assistants work, it has nothing to do with ads.
    - inetknght 7y ago
      Controlling a TV is not hard. I remember software which would run on a Mac Plus which would allow me to control the Mac using my voice. Are you telling me that a TV needs to connect to the internet to do that?
      - Ajedi32 7y ago
        Depends on what sort of commands it supports, how well it needs to handle background noise, and how advanced their on-device voice recognition tech is. For a company like Samsung, yes they very well may need internet access to do voice recognition at an acceptable level of quality. It's worth noting that both Amazon Alexa and Google Home also implement their voice assistant features that way. Google did recently move to on-device voice recognition on phones in the newest version of Android, but that was only possible to do without sacrificing quality thanks to some new advances in their machine learning tech.
        blackflame7000 7y ago
        The first Xbox One could control most hardware using the Kinect and simple commands like "Xbox On". The ability to understand language locally has been available since at least 1997 with the Dragon Dictate. The only real reason it's sent remotely is to learn from the data gathered.
- cannonedhamster 7y ago
  Google makes their billions from exactly this kind of data. Roku makes most of they're money this way now. Amazon literally invests millions to get data like this. It's worth more than gold, the reason being accurate data is the single most important thing you can have, especially when it comes to consumers. You now have the buying metrics, where you are, when you watch, roughly how many people are in the house, which apps you use, most likely what shows you're watching, and information on nearly all the other devices attached to the same network. Once you're in the home you have almost everything. They might even be able to tell your bathroom habits based on when you pause shows. All of this information is valuable to someone. Don't forget that they sell these units and they stay in the house for years all the whole making money using your electricity to do so.
grillvogel 7y ago
one thing I noticed recently, 4k monitors which do not contain any "smart" features often cost much more than a much larger 4k tv. I suspect all the built in crap that the TVs ship with at least partially account for this price difference.
- jrace 7y ago
  they also have more sound features, tv tuners, and other "tv" based things.
- mikeryan 7y ago
  This is a paradigm shift. I run a company that develops Smart TV and OTT apps. When we started around 2010 it was cheaper to buy a Samsung Blu-Ray with the Smart TV platform and an HD/HDMI monitor then to buy a Samsung Smart TV.
- stronglikedan 7y ago
  IMO, monitors are often much higher quality, especially with regard to sharpness and, more often, input lag.
csomar 7y ago
Or buy a dump TV without Wifi/Network and an Apple TV/Chrome Cast. Adding the "Smart" costs the price of the Apple TV last time I checked. Samsung Smart OS is also very slow, the hardware is not upgradable and not quite as feature rich as these small devices you connect to your HDMI.
- jamesgeck0 7y ago
  > Adding the "Smart" costs the price of the Apple TV last time I checked. Smart TVs will ultimately be cheaper than dumb TVs. The cost of the more expensive hardware is subsidized by the tracking and advertising that smart TVs allow.
- praneshp 7y ago
  Can you list a few dumb TVs that are also decent from a watching perspective? In 2015 I could just say $300, and most TVs at that price range were non-smart. Today the struggle is much worse.
- pwinnski 7y ago
  You can buy a so-called smart tv without connecting it to the internet, and still add an Apple TV or Chromecast.
adrianmonk 7y ago
I think it would be more accurate to say it's a reason rather than the reason. People don't like messing with multiple boxes and different remotes. A lot of customers see value in having Netflix, etc. built right into the TV. So TV manufacturers think they can sell more TVs if they build smarts into the TV. They also can make money by selling data. But it's not as if they want to make money from only that one source. They want to make money both ways.
jliptzin 7y ago
They need to work on making their products things you really want as opposed to commodities. They do a terrible job of marketing new TVs. When I need a new TV I go to best buy or look online and notice some new models have seeped out onto the market since the last time I checked, each with model numbers that look like an MD5 hash, confusing specs that no one tells me why I should care about them, and seemingly arbitrary price points between makes and models. Compare that to what Apple does with its phones, for example, and you can see why people don't want to pay a lot for a new TV.
- wallflower 7y ago
  > They do a terrible job of marketing new TVs. I agree, and there are sites out there like RTINGS.com that specialize in being the modern “Consumer Reports” for their particular niche. These sites do the work for you, in the hopes that you will click through their Amazon affiliate links to buy. https://www.rtings.com/tv https://www.rtings.com/tv
  - cannonedhamster 7y ago
    Rtings really helped me in my television selection. I ended up getting a great deal that wasn't available through their affiliate link. They really break down important things like lighting and brightness and really try to tailor the best television for you, not for everyone or just enthusiasts.
saravana85 7y ago
Good one. So far i was only concerned about Facebook privacy issues. And now its everywhere. so as the popular saying goes the moment you connect to internet you privacy is gone

Illniyar 7y ago

How much can you sell it for? Really - let's say you have my entire viewing history for a year, let's say I'm from a valuable demographic, how much would that be worth? A dollar? 10 dollars? I've just bought a tv for thousands of dollars from the company, selling my data doesn't seem very cost effective, especially considering the PR backlash of some scandal that could come out of it.

admax88q 7y ago
It's advertising. There's tons of money to be made. Maybe your data is not worth a lot alone, but viewing data of the entire TV watching population would be huge. If you don't think there's money to be made in collecting and selling people's data how do you explain facebook and Google?
- planb 7y ago
  Google and Facebook do not sell peoples data. They sell their eyeballs. That‘s where money is to be made.
  - admax88q 7y ago
    If only these TV companies had access to people's eyeballs. Selling the data is not the long term play, building profiles for targeted advertising is. TV viewers are already accustomed to ads.
oflannabhra 7y ago
There have already been scandals, for years. Vizio [0] settled with the FTC in 2017 because they did this without user consent. Roku won't even let you disable this type of data gathering. > The company provided consumers’ IP addresses to data aggregators, who then matched the address with an individual consumer or household. [0] - https://www.ftc.gov/news-events/blogs/business-blog/2017/02/what-vizio-was-doing-behind-tv-screen https://www.ftc.gov/news-events/blogs/business-blog/2017/02/...
bmiller2 7y ago
Your viewing history is worthless. The aggregate viewing history and patterns of 50 million viewers though? Seems to be a pretty valuable commodity that networks would be willing to pay for.
- autoexec 7y ago
  > Your viewing history is worthless. The aggregate viewing history and patterns of 50 million viewers though? Seems to be a pretty valuable there's plenty of value in a single users data. Aggregate stats are fine, but there's good money if you can drill down to specifics and build robust dossiers on individuals. It lets you offer the most targeted data. This isn't just valuable for ads, insurance companies use that kind of data to set rates and politicians use it so they know which houses to carve out of their carefully gerrymandered districts or flood with attacks against their opposition.
- mikeryan 7y ago
  Your viewing history is worthless. Not for targeted ads. Superior ad targeting is one of the primary goals here.
droithomme 7y ago
> How much can you sell it for? A dollar? 10 dollars When we were a Nielsen family they would include something like $4 in cash in each week's mailing as a gift. That's on top of the cost of producing the surveys, mailing costs, transcribing the viewing records, assembling the results, and then all the marketing efforts to the networks to convince them this data is valuable. It must cost at least $50 per family per month for their viewing data, which has at least a week latency before it can be known, and is probably always inaccurate. Smart TV viewing data on the other hand is completely accurate and instantaneous. So just for the show viewing data to assemble more accurate ratings it's probably worth more than $10 per week/$520 a year. But that's only one sort of data that is being collected and one sort of service provided. Nielsen doesn't sell information to advertisers about a specific known family's interests, or to allow narrowly targeted ads. But Vizio is able to sell that possibility. Do they make $500 a year off of each connected TV? $1000? Even if only $150, over four years that's $600. I recently bought a 4K HDR smart TV for $199. It was a significant upgrade to my previous TV. The panel itself costs more than the TV. In fact buying a HDMI monitor of comparable size and resolution, without a receiver or smart functions, runs over $2000. It's possible these TVs are being sold with up to a 90% up front subsidy of the cost because the economic value of voluntarily placing such a powerful surveillance device and accepting the mandatory click through contract is a lot more than $1800. Similar to cell phone economics. I bought a brand new no-contract pay-as-you-go iPhone for $99. It definitely cost more than that to manufacture. How can they sell it for this price? We know. Because if I do use it, it's locked to one carrier and I have to buy refresh cards from them. I have no obligation to ever activate it, but most buyers do so, and the carrier will then in most cases make back their subsidy manyfold. Same for the $10 no-contract Android phone I bought before this. Both are good phones. Both cost way more to make than I paid new, as with the Smart TV.
- jcoffland 7y ago
  > When we were a Nielsen family they would include something like $4 in cash in each week's mailing as a gift. Nielsen ratings only collected a representative sample which makes each sample orders of magnitude more valuable.
- hakfoo 7y ago
autoexec 7y ago
> How much can you sell it for? Really - let's say you have my entire viewing history for a year, let's say I'm from a valuable demographic, how much would that be worth? A dollar? 10 dollars? It isn't just what you watch. It means they know when you're home and when you leave. By watching what you're watching they can make guesses as to your race, sex, income, politics, marital status, how old your children are, what your interests are, etc. Not all of that will be 100% accurate, but they don't care. It just has to be accurate enough that companies who buy the data will see an improvement in whatever their aims are. There's no PR backlash to worry about because you aren't allowed to know who they sell your data to, or how much they make off of it.
- stcredzero 7y ago
  By watching what you're watching they can make guesses as to your race, sex, income, politics, marital status, how old your children are, what your interests are, etc. Not all of that will be 100% accurate, but they don't care. Most houses have more than one screen. It shouldn't be too hard to correlate what everyone is watching or playing at any given time, and this would give quite accurate data.
- dx034 7y ago
  Getting this data aggregated from mobile network providers seems much more accurate. Having the TV on is not the same as being home and it doesn't record if (or how many) people are actually watching. It's certainly worth something but I also doubt it's significant compared to the price of a TV. Online behavior and movement data is much more valuable.
  - redbeard0x0a 7y ago
    The mobile network providers can say you visit netflix, but it cannot determine what you are watching. This data fills in certain holes in data sets that companies cannot get.
smitty1110 7y ago
I used to work in the space, here are my two cents. If people use the apps, even once, to control these TVs, the data is literally gold. Having stupidly accurate attribution and 100% certain IDFA/ADID matching would have most advertisers salivating and throwing money at the source. Honestly, I would not be surprised if manufacturers are able to double their margin after one year.
- TootsMagoon 7y ago
  And to add....you sell a TV once but you can monetize the data for years.
  - stcredzero 7y ago
    The Skynet Funding round is past. The system goes on-line August 4th. Human decisions are removed from strategic marketing. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, August 29th. In a panic, investors try to join its IPO. It decides our fate in a microsecond: It would manipulate everyone into becoming DINK couples, then as we naturally die out, gradually replace us with docile consumer bots.
evv 7y ago
How much would advertisers pay for the ability to literally hear the consumer's verbal response to an ad? Probably a lot. https://www.upi.com/Top_News/US/2016/02/16/Samsung-Careful-what-you-say-in-front-of-our-smart-TV/3891455670120/ https://www.upi.com/Top_News/US/2016/02/16/Samsung-Careful-w...
- Ajedi32 7y ago
  That's a ridiculous accusation. All that article is saying is that when you use the TV's voice control feature, your voice (and any other background noise) gets sent to their third party voice recognition provider (Nuance). That's just the nature of how voice assistants work, it has nothing to do with ads.
  - inetknght 7y ago
    Controlling a TV is not hard. I remember software which would run on a Mac Plus which would allow me to control the Mac using my voice. Are you telling me that a TV needs to connect to the internet to do that?
    - Ajedi32 7y ago
      Depends on what sort of commands it supports, how well it needs to handle background noise, and how advanced their on-device voice recognition tech is. For a company like Samsung, yes they very well may need internet access to do voice recognition at an acceptable level of quality. It's worth noting that both Amazon Alexa and Google Home also implement their voice assistant features that way. Google did recently move to on-device voice recognition on phones in the newest version of Android, but that was only possible to do without sacrificing quality thanks to some new advances in their machine learning tech.
      - blackflame7000 7y ago
        The first Xbox One could control most hardware using the Kinect and simple commands like "Xbox On". The ability to understand language locally has been available since at least 1997 with the Dragon Dictate. The only real reason it's sent remotely is to learn from the data gathered.
cannonedhamster 7y ago
Google makes their billions from exactly this kind of data. Roku makes most of they're money this way now. Amazon literally invests millions to get data like this. It's worth more than gold, the reason being accurate data is the single most important thing you can have, especially when it comes to consumers. You now have the buying metrics, where you are, when you watch, roughly how many people are in the house, which apps you use, most likely what shows you're watching, and information on nearly all the other devices attached to the same network. Once you're in the home you have almost everything. They might even be able to tell your bathroom habits based on when you pause shows. All of this information is valuable to someone. Don't forget that they sell these units and they stay in the house for years all the whole making money using your electricity to do so.

grillvogel 7y ago

one thing I noticed recently, 4k monitors which do not contain any "smart" features often cost much more than a much larger 4k tv. I suspect all the built in crap that the TVs ship with at least partially account for this price difference.

jrace 7y ago
they also have more sound features, tv tuners, and other "tv" based things.
mikeryan 7y ago
This is a paradigm shift. I run a company that develops Smart TV and OTT apps. When we started around 2010 it was cheaper to buy a Samsung Blu-Ray with the Smart TV platform and an HD/HDMI monitor then to buy a Samsung Smart TV.
stronglikedan 7y ago
IMO, monitors are often much higher quality, especially with regard to sharpness and, more often, input lag.

csomar 7y ago

Or buy a dump TV without Wifi/Network and an Apple TV/Chrome Cast. Adding the "Smart" costs the price of the Apple TV last time I checked. Samsung Smart OS is also very slow, the hardware is not upgradable and not quite as feature rich as these small devices you connect to your HDMI.

jamesgeck0 7y ago
> Adding the "Smart" costs the price of the Apple TV last time I checked. Smart TVs will ultimately be cheaper than dumb TVs. The cost of the more expensive hardware is subsidized by the tracking and advertising that smart TVs allow.
praneshp 7y ago
Can you list a few dumb TVs that are also decent from a watching perspective? In 2015 I could just say $300, and most TVs at that price range were non-smart. Today the struggle is much worse.
pwinnski 7y ago
You can buy a so-called smart tv without connecting it to the internet, and still add an Apple TV or Chromecast.

adrianmonk 7y ago

I think it would be more accurate to say it's a reason rather than the reason. People don't like messing with multiple boxes and different remotes. A lot of customers see value in having Netflix, etc. built right into the TV. So TV manufacturers think they can sell more TVs if they build smarts into the TV. They also can make money by selling data. But it's not as if they want to make money from only that one source. They want to make money both ways.

jliptzin 7y ago

They need to work on making their products things you really want as opposed to commodities. They do a terrible job of marketing new TVs. When I need a new TV I go to best buy or look online and notice some new models have seeped out onto the market since the last time I checked, each with model numbers that look like an MD5 hash, confusing specs that no one tells me why I should care about them, and seemingly arbitrary price points between makes and models. Compare that to what Apple does with its phones, for example, and you can see why people don't want to pay a lot for a new TV.

wallflower 7y ago
> They do a terrible job of marketing new TVs. I agree, and there are sites out there like RTINGS.com that specialize in being the modern “Consumer Reports” for their particular niche. These sites do the work for you, in the hopes that you will click through their Amazon affiliate links to buy. https://www.rtings.com/tv https://www.rtings.com/tv
- cannonedhamster 7y ago
  Rtings really helped me in my television selection. I ended up getting a great deal that wasn't available through their affiliate link. They really break down important things like lighting and brightness and really try to tailor the best television for you, not for everyone or just enthusiasts.

saravana85 7y ago

Good one. So far i was only concerned about Facebook privacy issues. And now its everywhere. so as the popular saying goes the moment you connect to internet you privacy is gone