SME#24: Our data for a free Telly, deal or no deal?

Streaming Made Easy #24

Welcome back to Streaming Made Easy. This week, we take a look at Telly, Pluto TV co-founder Ilya Pozin’s new venture and whether it’s a genius move or not.

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Today at a glance:

• Analysis: Our data for a free Telly, deal or no deal?

• Streamer snapshot: The MK2 Youtube Ciné Club

• Content recommendation: “Audience-ology” by Kevin Goetz

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💡 Analysis:

Ilya Pozin’s new venture “Telly” grabbed the industry headlines this week and not without reason.

Reason n°1: Pozin co-founded Pluto TV with Tom Ryan in 2014. Given where Pluto TV is today (bought by Viacom for 340M$ in 2019 and now bringing 1.1B$ revenues in 2022), a venture by its former founder can only pique everyone’s interest.

Reason n°2: The elevator pitch for Telly stands out “Get a Free Television in exchange for your consent to receive personalised ads” but more on that later.

At this point, industry commentaries revolve around sharing their 2 cents on the company as the launch is scheduled for this summer so there isn’t much to chew on just yet.

Let me cheap in with my own 2 cents:

What is Telly?

The origins:

When Pluto TV got bought by Viacom, co-founder Tom Ryan became CEO of Pluto TV which became a Viacom subsidiary operating independently. The 150 employees and the co-founder (i.e. Pozin) stayed on. Today, Tom Ryan is CEO - Streaming at Paramount which says a lot about how smart he is but also how Viacom bought more than Pluto TV, they bought his know how and want him to apply it across all their streaming ventures.

I don’t know when Pozin actually left Viacom but Telly is said to have taken 2 years in the making. Fast forward to today and this week’s announcement of the summer launch of Telly.

The vision:

There is a lot of money to be made in advertising but little in hardware according to Pozin so let’s give a TV away for free in exchange for user consent to be served personalised ads.

It’s a trade off, they give something, consumers do too.

What’s the difference with how we buy TVs?

Today, we buy a TV and we give our consent (or not) to have our data collected throughout our TV experience. This enables the TV OS (i.e. Operating System) to learn from our behaviours to improve the navigation experience, the content discovery and ultimately to serve us ads on platform and within applications carried by the platform.

With Telly, consumers give consent but get a perk: a Free TV.

If you don’t want to give consent, the TV will cost you 500$.

The device:

Telly is a 55-inch Connected TV powered by an Android TV streaming stick, a sound bar and a second screen. What does it look like? See for yourself:

The top screen is your typical flat screen UHD/4K/HDR TV with a tuner to watch Free TV. Less typical is the inclusion of a webcam which screams privacy issues to me when the deal is all about users giving consent to be tracked. Telly says it can be disabled though.

The TV can be voice activated (a Google powered voice assistant tweaked to respond to Telly commands?).

Below the TV is the sound system and then a 2nd screen.

This 2nd screen is the most interesting piece of hardware here. It could bring interactivity to our TV experience, imagine Prime Video’s X Ray feature (showcasing information on what’s on screen, the lead actors, the soundtrack etc.), E-commerce features or Sports results as shown above, without disturbing the main screen.

Now it could come as a major distraction for some. Can it be turned off? Doubtful as it’s meant to be the ad revenue generator behind Telly. Some folks will try but not your every day Joe.

Another thing strikes me: you need a big wall to hang your TV, you can’t put it on a media center. It may seem like nothing but it calls for some living room adjustments. I don’t have a big enough wall for example. Something to consider when going international, our living room aren’t as big as the ones in US homes.

The platform:

Force of habit, I immediately wondered who was operating the device in the background. It’s Android TV but not natively, hence why a streaming stick is integrated (or you use the HDMI port to plug one you already have).

This means that you won’t have your top streaming apps accessible via Telly which begs the question: won’t they miss out on tons of ad impressions if Telly viewers use the Android TV interface for navigation?

I wonder why they didn’t build the OS themselves or license a 3rd-party OS (there’s plenty of them going around: Roku TV, Android TV, Linux, Vidaa, Tizen etc.).

I guess the 2nd screen is expected to bring the bulk of the business.

The services:

Telly will offer a range of services on platform (besides the apps from Android TV):

• A Games room

• Music streaming services (Spotify? Tidal?)

• Fitness room

The advertising:

I have no doubt Pozin will build a powerful ad team and as the concept calls for ad format innovations, I hope the product team will thrive to offer a stellar ad experience.

Now will they have enough reach to make it appealing for advertisers? Advertisers used to allocating significant ad $$ to CTV advertising could be interested to test and learn. Advertisers still very much focused on digital and TV advertising won’t make the jump for a 500K installed base.

Telly indeed ambitions to ship 500K TVs in 2023. Of these, how many will become an active device? When you get something for free, don’t you tend to play with it and leave it in a corner?

My final thoughts:

Overall, I love the disruptive approach of Telly. Innovations have been limited in our space lately so it’s exciting in that respect.

Now, I see a couple of headwinds going their way:

→ The value exchange

Af first, it feels like a good deal, a TV worth 500$ given away for free but let’s be clear long-term our data is worth so much more. If you longer want to share your data, you have to pay or you may simply unplug the TV.

→ The 2nd screen experience

It’s heads or tails on whether consumers will enjoy a screen playing non stop below the main screen.

→ Privacy

Few US media outlets mentioned it. It maybe a given in the US that it’s no big deal to trade a device for consent. I’d be curious to hear EU privacy protection bodies’ take on this.

Once Telly is ready to go international, they may need to take a closer look at regulation but also consumers’ sensitivity when it comes to data sharing (e.g. in a past life, I did a study on German’s behaviours towards feeding credit card details when creating an account for a streaming device, guess what? They hate it).

→ The platform or lack thereof

It wouldn’t have hurt to have ad impressions from the platform on top of the ad impressions from the 2nd screen. If users plug a 3rd-party streaming stick, they go blind, don’t they? I even wonder how much Android TV will share with them anyway.

→ Reach and ability to scale

They will need to give away a lot of TVs to catch up with market leaders like Roku who have 70M active devices (with the biggest bulk in the US).

Let’s wait and see.

I won’t be able to get a TV but feel free to get one and report back for “Streaming Made Easy”.

📺 Streamer snapshot:

This week, I’m going to stay clear of streaming (well sort of) to talk about the Youtube Cinéma Club. French movie producer & theatrical chain MK2 announced its upcoming launch in its movie theaters.

The concept: opening theaters to different forms of creation (besides long-feature films). MK2 did it in the past with operas and ballets, philosophy masterclasses etc. This time, they will start a ciné club around Youtube content.

The goal: to offer the movie going experience to Youtube content creators and their audiences, build a space to exchange in real life around the content they share a passion.

I love the concept as it shows that cinema is capable of building a bridge with social media platforms and therefore their younger audiences plus there is no contempt towards video content here.

Curious to see how Ambroise Carminati (behind the Youtube channel “SYMPA COOL“ - 411K subs) brings this ciné club to life.

🎬 Content recommendation:

It’s about time I recommended something besides video content because yes I read too ☺️

I devoured “Audience-ology” by Kevin Goetz. He built a test screening company and it’s fascinating to discover how test screenings influence the creative process. It’s full of anecdotes of movies we love.

I’m keen to see a 2nd iteration of it focused on streaming to understand how Netflix and co screen test their projects. With profitability at the heart of the streaming today, it would make sense to make fewer titles not in an arbitrary way but based on actual audience’s feedback.

Get your copy.

That’s it folks. Enjoy your weekend and see you next Friday for another edition of Streaming Made Easy!

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By night, I write Streaming Made Easy and post each working day on Linkedin.

By day, I run The Local Act, a streaming video consultancy.

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