Why are TVs so cheap now? Well, your smart TV is watching you and making extra money, too

smart TV
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Your smart TV is watching you. And making money off you as well.

That's why the prices of TVs have fallen so dramatically over the last five years.

A mix of lower LCD prices, more intense competition and new ways to profit off the consumer once the set enters our homes have turned the boob tube into something more like a razor. And we, the viewers, are the razor blades.

Bill Baxter, the Chief Technology Officer for TV set giant Vizio, referred to it as the "post-purchase monetization" of the TV on a recent podcast interview with the Verge.

Translated, that means that more ads are coming at you via prominent branded movie and TV channels on smart TVs. These channels share ad revenues with set manufacturers like Vizio, Samsung, LG, an avenue that didn't exist in the pre-streaming era. They also profit by selling data of your viewing histories to programmers and marketers.

The manufacturers have been tracking viewers on smart TVs for several years, but it wasn't until 2017 and beyond that more consumers started buying smart sets, which negate the need for a streaming device like a Roku or Fire Stick to bring in online entertainment from the likes of Netflix and Hulu.

Today, virtually all TVs sold today are smart TVs, says Steve Koenig of the Consumer Technology Association.

So what's new, and helping manufacturers make money off us once the TV enters our home, is the rise of ad-supported streaming channels that share ad revenues with the likes of Vizio, Samsung and LG, and get prominent positions on the smart TV dial.

—On Vizio TVs, the "Watch Free TV," channel on its smart TV sets is actually the same Pluto TV channel seen on streaming players, computers and .

—Rival Xumo has a similar arrangement, called Channel Plus on LG sets.

—Tubi is on Samsung TVs and Xumo on Panasonic, Sanyo and Sharp sets.

—Streaming player maker Roku has its own arrangement with TCL, which sells Roku branded sets, where it offers the Roku Channel.

The Roku channel is similar to Xumo, Tubi and Pluto in offering ad-supported older movies and TV shows, for free, as an alternative to all those internet streaming channels that charge a monthly subscription.

Being on smart TVs is "great for us," says Pluto CEO Tom Ryan. "The hardware companies, in their quest for higher margins, are looking to content and services to get more revenue. We've got it."

TVs have historically been a cutthroat, low-margin business, hence all those Black Friday deals of large-screen sets going out the door for $300 to $400. We found a 43-inch TCL Smart TV with 4K resolution at Target this month for $250.

The wholesale price for an average 50-inch set has fallen to $335, from $589 in 2013, according to the CTA.

Once "smart TVs" began to become popular, manufacturers saw a new opportunity in treating the set as a "glass window" to our viewing habits and reporting them to marketers for a fee, in a process called Automatic Content Recognition or ACR.

In 2017, Vizio settled with the Federal Trade Commission and New Jersey's attorney general office for $2.2 million, when it was charged with collecting data without the consent of users.

Now, Vizio, which continues to collect data, has users opt-in. "Unless you turn off ACR collection in the Settings menu, we may share viewing data with data partners, including analytics companies, media companies and advertisers," Vizio tells viewers in the settings menu.

The manufacturers say what they're doing is no different from what Nielsen has done for years. They monitor your viewing to determine the hits and they say they do it anonymously. (Of course, with Nielsen, the process of signing up and participating is a great deal more obvious and visible.)

As Inscape Data Services, the wholly-owned subsidiary of TV set manufacturer Vizio says on its website that it collects data without "personally identifiable information (PII)," to identify "what show is being watched and what IP address the device is connected to."

Justin Brookman, the director of privacy and tech policy for nonprofit consumer advocacy organization Consumer Reports, doesn't buy it.

"There's no such thing as anonymous tracking," he says. "They have ways...to tie them to your TV."

If "I Spy TV" sounds creepy, well, how about those other tech devices in your home?

"This pales in comparison," says Jodie McAfee, a senior vice-president of Inscape, which collects data from over 10 million Vizio smart TVs. "What a TV is generating on data is not nearly as granular. It just knows what shows I'm watching and whether the ad is being viewed."

Compare that to a smartphone, which tracks your every move in the house, both physically and on the device. It knows what websites you've been to, who you called and texted with, what products you purchased, and if you turned on Facebook or signed into Google, your age, demographic, salary and more.

Unlike other devices, smart TVs haven't been affected by the Trump administration's trade war with China, where most of the sets are made, says Steve Koenig of the CTA.

"Car audio has been hit, but smart home products haven't been," he says. "We believe tariffs are a tax on products, and don't want to see them in any form."

Meanwhile, back in the living room, McAfee insists that ACR tracking can help consumers by finding better recommendations. "It improves the viewing experience," he says.

And if you don't want your viewing tracked, viewers can go to the menu settings and turn off ACR (which is supposed to be off by default anyway.) Or, they can go a few steps further and turn the Wi-Fi off on the set altogether.


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Citation: Why are TVs so cheap now? Well, your smart TV is watching you and making extra money, too (2019, February 22) retrieved 16 October 2019 from https://phys.org/news/2019-02-tvs-cheap-smart-tv-extra.html
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Feb 22, 2019
I read that LG TV's will not even allow you to opt out of surveillance. And LG explicitly warns people not to say anything they wouldn't want to have transmitted. This iis Big Brother in spades. The only solution: DO NOT HOOK YOUR TV TO THE INTERNET. The convenience is not worth your privacy.

Feb 22, 2019
I have been mocked by saying such a thing, as usual it isn't real until an authority figure agrees. But it isn't limited to TV's, your smartphones, tablets, smart appliances, 5G, etc. are listening in too. Huawei, i-phone, or otherwise.

Feb 23, 2019
I read that LG TV's will not even allow you to opt out of surveillance. And LG explicitly warns people not to say anything they wouldn't want to have transmitted. This iis Big Brother in spades. The only solution: DO NOT HOOK YOUR TV TO THE INTERNET. The convenience is not worth your privacy.

That only works so long as the companies don't purchase wifi access through AT&T, Comcast or others and manage to connect themselves in 35 to 40 percent of the owners, even when you haven't enabled it on your home network.

Feb 23, 2019
We'll have to turn on the shower or radio so the TV can't understand us. Even put talk radio on for the TV to hear and make the spy listeners hear commercials.

Feb 25, 2019
You get out of 'surveillance' the old fashioned way. You turn it OFF.

You use YOUR OWN ROUTER.

You FIND the M.A.C. code that ALL internet grabbin' devices are required by LAW to have and block it in YOUR router, not the fone svc provider's router.

Fone service companies will demand that they use their proprietary router as the in house terminus to their fiber-optik line, but aft of that router, they cannot legally stop you from putting your router in direct line as YOUR firewall. YOU can use your router to stop them...COLD

Feb 25, 2019
If there is still a problem, then wrap the entire TV in aluminum foil...that leaves the screen so no go, so then wrap the fone company's router in foil or put it in a copper fine screened box, all six sides and ground the screen to thirteen foot deep copper ground rod. Only way into the box is with shielded cable. Coax in and coax out to your router. Turn OFF the wi-fi broadcast signal from your router and the company's router. If you cannot do this, then ground the antenna outputs of the wi-fi router. If your teevee puts out a radio signal to a cell carrier, get a cellfone jammer to cancel out the signal. Also you could build a Van de Graff static generator in the attic that puts out 1000 watts to drown out that hated fone signal while watching tv. If the teevee still broadcasts when off and unplugged, put that van de graff genset right next to the teevee and let er rip to short out the broadcast circuit. At this point tv will call for help fonco to get lawyers say they own u

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