Telly, a startup led by co-founder Pluto TV, is offering dual-screen smart TVs for free

Telly, a startup led by one of the founders of Pluto TV, is taking a new path in promoting dual-screen smart TVs.

After emerging from a 24-month stealth period, the company says it will offer the first 500,000 models in bulk for free to consumers when they start shipping this summer. Telly founder and CEO Ilya Buzyn told Deadline in an interview that the 55-inch sets, which have 4K HDR picture quality and a premium soundbar built-in, will sell for more than $1,000.

Telly says it’s bringing the market’s first dual-screen smart TV. Below the main panel, a smaller screen is a channel for sports scores, news, weather, display ads, and other supplemental information. The lower screen can also go dark, for example when playing a movie on the larger screen.

The free giveaway is an attempt to change the mainstream business model in broadcasting and have ads fund entirely the device itself. “TVs have become a commodity,” Posen said. “When a category becomes a commodity, what happens? It’s a price race to the bottom. There’s very little margin to be made on hardware.” Over time, he continued, smart TVs have “become exponentially weak. It’s the biggest screen in our house, but it’s as dumb as an ATM.” Rather than set out to make a bargain-priced TV, Telly targeted the higher end of the market. After the 55-inch range was introduced, larger sizes are expected to follow.

Investors in Telly, which launched two years ago, include LightShed Partners and Vayner Media, and Ryan Reynolds-backed MNTN TV advertising company formed a partnership with the company. The directors haven’t said exactly how much money they’ve raised, though they say Telly’s post-raise valuation will be in the nine-figure range. The hope is to emulate the trajectory of Pluto, which Posen co-founded with Tom Ryan in 2013 and sold to Viacom six years later for $340 million. While the acquisition price seemed steep at the time, it turned out to be a steal as Pluto became a multibillion-dollar pillar of Paramount Global’s streaming portfolio, which Ryan now oversees.

Given the difficult hardware economy, smart TV players such as Samsung, Vizio, and LG have shifted towards free, ad-supported TV streaming. [FAST]. Telly’s strategy differs from Telly’s in that it does not promote its broadcast platform. Instead, it’s meant to be a living room hub for thousands of apps — streaming video, of course, but also video conferencing, music, fitness, gaming, and other categories. The bottom screen video chat feature allows you to bring together a group of friends or family and sync their group viewing of a game, event, or movie to the home screen.

Several times during a 30-minute demo presented to Deadline in New York, Posen referred to the iPhone, saying that Telly’s goal was to disrupt the streaming market like the Apple device when it was first introduced. Items that were once essential such as digital cameras, GPS devices, and other things are instantly outdated. Telly believes that rather than fiddling with their phones, viewers will be able to access a range of supplementary information without shifting their focus to another screen. This extra degree of attention is worth a lot to advertisers in the fast-growing but distinctly fragmented streaming advertising sector.

Of course, there will be trade-offs made by those who sign up for free Telly in terms of agreeing to hand over certain data, but Pozin said the company has made an effort to prioritize consumer privacy. The smart TV sector has seen other abuses over the years, with Vizio being fined $2.2 million in 2017 after federal regulators found the company’s data practices were deceptive. It has also been reported that TV data company Alphonso is accessing viewers’ audio inputs without adequate disclosure.

“Everything is very transparent with our customers,” Posen said of Telly. “Everything is available. We don’t bury things in long-term service agreements. You know exactly what you’re getting into. We stay above board.”

Any cable or satellite TV input can be connected to the Telly via the three HDMI ports. The set comes with a 4K Android TV streaming stick. Users can also connect a connected device from Roku, Amazon Fire TV, Apple TV, or other providers (another point of difference with current smart TV makers, who focus on keeping viewers within their operating system).

“While everyone talks about smart TVs, the reality is that TVs haven’t changed dramatically over the past two decades, and the dream of interactive TV hasn’t really come true,” said Richard Greenfield, general partner at LightShed and a veteran media analyst. “Telly is a huge leap forward, capitalizing on the explosion of the connected TV advertising market and consumers’ desire for more control and interaction that doesn’t disrupt their TV viewing experience.”

Vayner Media CEO Gary Vaynerchuk said he believes Telly will help his company’s clients “create an entirely new form of brand engagement that consumers truly value.” Mark Douglas, CEO and founder of MNTN, sounded a similar note. “Brands will be able to seriously elevate their performance marketing strategy – right there on the biggest screen in the house,” he said.