If viewers like free TV channels, they’ll love a free TV set even more.
That’s the idea behind Telly, a new company launched by CEO Ilya Pozin, a founder of Pluto TV, the free-ad supported streaming platform acquired by Paramount Global.
Telly plans to give people a new, state-of-the-art set with a unique dual-screen design worth about $1,000. On Monday, it opened a website where consumers can sign up for one of the first 500,000 free sets that will begin shipping this summer.
The company expects to make money selling targeted advertising and data about what its customers are watching and how they respond to advertising through an array of apps that will be available to users.
“Telly is a revolutionary step forward for both consumers and advertisers,“ Pozin said. “For too long, consumers have not been an equal part of the advertising value exchange. Companies are making billions of dollars from ads served on televisions, yet consumers have historically had to pay for both the TV and the content they watch.
“All of that changes today,“ he said. “When I co-founded Pluto TV, we created an entirely new model that offered amazing TV content to viewers for free. Now, with Telly, we are providing the actual television for free as well.”
The venture is backed by a group including media-industry analyst Rich Greenfield’s LightShed Ventures, which co-led Telly’s initial funding round, and Gary Vaynerchuck, CEO of Vayner Media, an agency that specializes on younger demographics and social media.
“Telly is a huge leap forward, leveraging the explosion of the connected-TV ad market and the desire from consumers for greater control and interactivity that does not disrupt the TV viewing experience,” Greenfield said. “The groundbreaking dual-screen design enables advertisers to completely reimagine the living room experience while providing consumers an incredible TV at the easy-to-say-yes-to price of free.”
MNTN, which specializes in precision media campaigns (and has actor Ryan Reynolds as its chief creative officer), is a launch partner with Telly.
The Telly TV features two screens. The first screen has a 55-inch, 4K picture. The second screen displays an array of customized apps and ads. It also has a five-driver sound bar built in.
“Don’t let free fool you — this is the most powerful and advanced TV ever built,” Dallas Lawrence, chief strategy officer at Telly, said. “It is packed with so much technology and computing power, you should think of it more like a Tesla.”
Lawrence, formerly with Samba TV and Roku, noted that 80% of adults also use a second screen — such as a smartphone — when watching TV. “Our goal is to say, put that one away. Everything you need is right here,” he said.
The set is managed by Telly OS, which controls the two-screen experience. The Telly OS is not a streaming operating system. The set comes with an Android TV dongle enabling it to receive connected-TV programming via streaming. It also has a broadcast tuner and three HDMI inputs that allow users to plug in their choice of streaming devices, including Roku, Amazon Fire TV or Apple TV.
At launch, the rectangular second screen features a smart assistant, like Alexa, called Telly. It comes with 40 video games and a fitness app that’s driven by a built-in camera with full motion capabilities. Zoom is also a launch partner. Telly can also help search for something to watch via an artificial-intelligence based recommendation engine and connect the viewer to the show with a click on the remote or voice command.
Smarter Smart TV
“It’s almost an oxymoron to call TVs today smart TVs,“ Lawrence said. “They’re really just a screen with a plug in the back that delivers content to you. It hasn't evolved much in a decade. This is the first truly smart screen that has all of your apps, all of your capabilities, in the living room.”
Telly will be frequently updated. In the future, users could ask Telly who is at the front door by connecting to a doorbell app or raise the temperature via a smart thermostat.
While watching TV on the big screen up top, a user can add apps to display a news feed, a weather feed or a sports feed on the bottom screen. Someone watching a football game can check stats, fantasy results and odds, or make a bet through FanDuel, all with the click of a remote. Or they can Zoom with other fans. Part of the second screen featuring an ad could be sponsored by Pizza Hut, enabling the user to order food.
The second screen has an advertising section that’s always on and connected via remote. Because the ad is on the second screen, it doesn’t interrupt programming. And because it is interactive, it could be particularly valuable to programmers, who could get viewers to sign up for Apple TV Plus or Paramount Plus or tune into the Oscars with a voice command or a click on the remote.
“Every single interactive-TV experience I have ever seen has always distracted from the on-screen experience with an overlay on top of what you are watching, or it shrinks the screen,” Greenfield said. “This will be the first time ever where the interactivity doesn’t obscure the actual main screen.”
Ultimately, Telly could help the TV ecosystem. “The more connected TV sets out there, the better,” Greenfield said. “If you create increased engagement through an interactive second screen, it’s better for all these content creators. If I were at Netflix or Disney Plus or Pluto or Tubi, I would love this.”
Tell Telly About Yourself
When people sign up for Telly, they agree to fill out a survey. “The day we install our TV we know a lot about you that you shared,” Lawrence said. Other set makers don’t know anything about who is buying their TVs, he noted.
Telly’s user agreement allows the company to collect anonymized automatic content-recognition data. Telly is also equipped with built-in radar that enables it to know exactly how many people are in front of the TV at any given time.
“We can tell if two people saw the ad on the TV or if no one was in front of the ad. These are all things no one else could do at scale today,” Lawrence said. “By the end of this year, we’ll have half a million TVs and homes producing data. Our panel will be 10 times larger than Nielsen’s entire panel and hundreds of times larger than TVision’s.”
Several measurement companies have already signed to receive person-level data from Telly. “Just from our initial data licensing agreements, the average revenue per user on this television is already more than twice what Roku's ARPU is,” Lawrence said.
That data will be used to make the ads that appear in programming on the big screen more targeted.
"We’ve seen a great response from the biggest brand advertisers across the entire consumer landscape including brands like Kia,” Lawrence said.
MNTN sees Telly data enabling it to run performance campaigns and better measure the results.
“Television is the most powerful medium in the world, and MNTN’s clients know it,” said Mark Douglas, CEO and founder of MNTN, said. “With Telly and MNTN, brands will be able to seriously level up their performance marketing strategy — right there on the biggest screen in the house. With Telly, free ad-supported TV just got real. Literally.”
Telly also is working on a plan to provide its users with even more value by launching Telly Rewards over the summer.
“If you watch the presidential debate Telly will ask, who do you think won?“ Lawrence said. “Or, if you saw a preview of Guardians of the Galaxy, [it will ask] are you planning to go see it?”
Participants will get points that will be good for things like free Netflix subscriptions or Amazon gift cards.
“So it’s the free TV that will continue to reward you for the lifetime you have it,” he said.
