There's a simple reason why your new smart TV was so affordable: It's collecting and selling your data
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REUTERS/Jeff Haynes
Did you get a 4K/HDR capable TV this past holiday, perhaps on sale? Millions of Americans did.
Massive TVs with razor-thin frames, brilliant image quality, and streaming services built-in are more affordable than ever thanks to companies like Vizio and TCL.
TCL/Roku
The Roku TV interface on TCL's smart TVs comes with a prominent ad placement on the home screen.
"This is a cutthroat industry. It's a 6% margin industry," Baxter said. "The greater strategy is I really don't need to make money off of the TV. I need to cover my cost."
More specifically, companies like Vizio don't need to make money from every TV they sell.Smart TVs can be sold at or near cost to consumers - which is great for consumers - because Vizio is able to monetize those TVs through data collection, advertising, and selling direct-to-consumer entertainment (movies, etc.) - which is less great for consumers.Or, as Baxter put it: "It's not just about data collection. It's about post-purchase monetization of the TV."
And there are a few different ways to monetize those TVs post-purchase.
Roku/TCL
On TCL's Roku TVs, users can opt out of the full scope of ad tracking. How much you're able to block yourself from data tracking varies by TV manufacturer.
"You sell some movies, you sell some TV shows, you sell some ads, you know. It's not really that different than The Verge website," he said.
It's those additional forms of revenue that helps make the large, beautiful smart TVs from companies like Vizio and TCL so affordable.
Without that revenue stream, Baxter said, consumers would be paying more upfront cost. "We'd collect a little bit more margin at retail to offset it."Copyright © 2021. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
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