A startup from the co-founder of Pluto TV believes America is ready for free TV

Is America ready for free, ad-supported TV? Ilya Buzyn, co-founder of Pluto TV (the free ad-supported streaming service now owned by Paramount), certainly thinks so.

On Monday, Pozin officially unveiled Telly, a company that plans to give away millions of premium TVs for free (the online reservation system opened Monday morning for an initial batch of 500,000 devices).

“For a very long time, consumers have not been an equal part of the exchange for the value of advertising,” Posen says. “Companies make billions of dollars from ads shown on TVs, yet consumers have historically had to pay for both TV and the content they watch. That’s all changing today. When I co-founded Pluto TV, we created an entirely new model that delivered great TV content to viewers for free. Now, with Telly, we’re giving away actual TV for free, too.”

In a faux living room setup in Telly’s New York office last week, Pozin gave a guided tour of the device, with a 55-inch 4K HDR display on top, a five-driver integrated soundbar directly below it, and a second smart display directly below. LED strips illuminate the back of the TV, projecting light onto the wall behind it (the LEDs can also be turned off).

Microphones at the top of the screen allow for voice-activated commands, while an HD camera (with built-in privacy shutter) allows for video calls and workout lessons, and a motion sensor will support interactive games.

As Posen described the device, the 55-inch screen acts as a standard TV, while a second screen displays weather, sports scores, and stock quotes, while a bolstered news ticker scrolls across the bottom. On the right was a square box where ads rotated through.

“Let’s say a football match is on, and we’ll show you the sports scores. Or you can put a picture-in-picture and you can watch another game,” Posen says. “You can imagine doing a FanDuel bet here on this device, your fantasy sports are pulled in, it’s kind of like the dashboard for your car. It has your speedometer, your odometer, your navigation, your radio, it enhances your viewing experience.” It also works independently by the way, you can turn off the top screen, leave it on and it becomes the main smart home hub.”

The Telly TV is not a cheap discount store TV. Posen says that if it sells for the same price as other TVs, it will retail for more than $1,000, and that the goal is to build a “future-proof” TV that won’t be outdated in three or four years.

“Don’t be fooled by the price point. It’s not a budget TV by any means, Posen says, adding that the intention is to offer software updates every two weeks to add features like karaoke, games, or workout lessons. “It is by far the smartest TV on the market. Nothing even comes close to it.”

It’s been so long since the introduction of free TV, supported by ads and data, that many marketers predicted it was “inevitable” years ago. Smart TVs like Roku, Amazon Fire, and Google Chromecast have already slashed their prices to near zero, trying to monetize ads and data over time. And the price of TVs is also steadily falling, as device makers sell viewer data and deliver advertising to their operating systems.

Telly will allow users to use any operating system they want, whether it’s a Roku, Fire TV, or even an old cable or antenna box. Whatever consumers are watching, the bottom screen will always have ads enabled. It will ship with an Android TV dongle (which usually costs around $30).

And of course, there is the data. Of great importance to making your TV free is, as Posen puts it, “the exchange of value.”

“You give us your demographics, individual and household psychology before you even get your device, so we know who you are, we know where you live, we know your income, we know what kind of car you drive,” Posen says. “We know when your lease ends.” We know what your favorite brands are. We know your favorite sports teams are, so when you first bring your TV home, you scan the QR code with your phone, and all the data is already there.”

“It is provided for this device that gives us full targeting and addressability,” he adds. “Similar to other TV makers, we have viewing data, but we also have audience data now in the individual household. When you combine those two things together, the targeting is literally one-to-one. So if Toyota wanted to run an ad for people who currently own a Honda whose lease is expiring In the next 12 months, we’re picking and choosing individual TVs and just those TVs and that’s where the ad comes in.”

Marketers are already on board, Buzyn says, with plans to unveil more details at next month’s Cannes Lyon.

“They’re all very excited, and we’re in partnerships with all the big agencies,” Posen says.

“TV is the most powerful medium in the world, and MNTN customers know it,” Mark Douglas, CEO and founder of connected television advertising company MNTN, said in a statement. “In today’s fragmented media landscape, we’re always eager to identify breakthrough opportunities to reach new audiences, and now with Telly and MNTN, brands will be able to seriously elevate their performance marketing strategy — right there on the biggest screen in the house.

Details about the amount of funding raised for Telly are not public, though the latest round was led by LightShed Ventures partner Rich Greenfield, who is also known as a prominent Wall Street media analyst.

“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,” says Greenfield. “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.”

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