Telly has unveiled a high-end dual screen, 55-inch TV that it will give away for free — so long as you watch the ads on the second screen.

As you can see in the image, there is a high-end TV (valued at around $1,000) that gives you your TV experience. Below the sound bar is a second smaller screen that has multiple ads on it. And those ads are targeted at you, and you can’t turn them off.

In addition, you have to agree to share some information about your household that enables advertisers to target you more accurately with relevant ads, said Dallas Lawrence, chief strategy officer at Telly, in an interview with GamesBeat. This kind of data may raise privacy concerns, but Lawrence said that customers are opting in upfront when they agree to take the TV for free.

I’ve always said companies should eventually pay us for our attention, and that we should all get paid to play games. It reminds me of the old razor and razor blades model around video game consoles, where a console was sold at a loss and the game companies made money selling games (which now cost as much as $70). It also reminds me of Facebook, which gave us free social networking and other features in exchange for accessing our data to deliver targeted advertising.

“You’ve nailed a couple of things. The founder created Pluto TV, and now he wants to tackle the TV business,” Lawrence said. “That same double dipping is happening on television, where the TV manufacturer is selling you the TV. And then whether it’s Roku, Samsung Vizio, LG, they’re going right around and selling you ads on that television and selling your data on that television. They’re licensing it out. So there must be a robust enough business model to deliver a great TV.”

The first shipments begin this summer for those signing up at www.freetelly.com.

The average person keeps a TV for six years, and TVs often make no profits for TV makers. In this case, Telly packs the TV with a lot of cool features. The remote has a microphone and that feature can be used for future possible upgrades, like letting you do karaoke on your TV.

Lawrence said that 80% of adults are looking at a second screen while watching television. If Telly does its job right, that second screen could be the lower part of your TV, where you might see ads that you actually care about.

How it works

Nobody else has a deal like Telly’s, and so the company will probably have a limit on how many free TVs it can give out. It certainly needs to be well financed to order a lot of TVs upfront and expect that they will be monetized over time. But Lawrence points out that most TV makers don’t make money even when they’re selling their wares. In that sense, it seems like TVs need a new business model.

Telly has been in the works for the past two years as the team plotted to make the ultimate free television upgrade for the living room. Now it has developed the first Dual Screen Smart TV available for “free.” And Lawrence said the plan is to deliver a lot of technology to users.

“This is the most powerful TV ever built,” he said. “It would cost you more than $1,000.”

The new form factor combines the cinematic picture quality of a 55-inch 4K HDR Theater Television Display with a separate built-in Smart Screen. The two screens are seamlessly integrated by a premium sound bar. Telly is powered by TellyOS, an operating system built for a dual-screen world, bringing experiences that go well beyond streaming into the living room.

When you are watching something on the top screen, the bottom screen goes into a kind of ambient mode so it’s less distracting. But when you are figuring out something to watch, then the Telly can recommend something through the second screen.

Giving away 500,000 units in 2023

The company announced it has opened the reservation system for the first 500,000 free units that will begin shipping to consumers this summer. But Lawrence said the company intends to scale to millions of TVs shipped in the future.

Telly is poised to not only disrupt the industry by delivering the most innovative TV in the market, but to revolutionize the industry’s business model by enabling advertisers to fully subsidize the cost of the TV itself for the consumer, and deliver it completely for free, Lawrence said.

Ilya Pozin, CEO of Telly, was the founder of Pluto TV, which now has about 80 million viewers.

“Telly is the biggest innovation in television since color,” said Pozin, in a statement. “Telly is a revolutionary step forward for both consumers and advertisers. 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. 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.”

Telly wants to transform the biggest screen in the home into the world’s first truly Smart TV, which will go beyond streaming to become the main device in the living room.

Telly’s features

Telly’s Smart Screen — the second, smaller one — lets viewers stay up to date with the latest news, sports scores, weather, stocks and so much more. It’s almost like the ticker you see on CNBC or the Bloomberg channel.

Viewers can gather together around the biggest screen in the home to watch Sunday football and track fantasy scores while watching the game. Movie night? Telly’s artificial intelligence helps deliver reviews and content recommendations, all on one device.

Video calls are also an application, as consumers can connect with friends, family and work colleagues from the biggest screen in the house. Viewers can even watch their favorite movie or sports teams together with friends and family across the county.

Telly’s Game Room is bringing the family back together for game night, packed with more than 40 video games, from arcade classics to immersive multiplayer experiences. And you’ll be able to play songs from popular music services on Telly’s stunning built-in five-driver sound bar.

There will be a voice assistant. “Hey Telly” connects living room experiences like nothing before with an innovative AI-driven voice assistant. And Telly turns the family room into a fitness studio with free advanced motion-tracking fitness programs designed for every lifestyle.

The business model?

The question arises, “How does Telly pay for this?”

There are three revenue streams, Lawrence said.

“The first is advertising. And what’s unique about this, and I come from Roku where I was at for before this Telly is not just tapping into the $70 billion US linear television ad market. It’s tapping into the $300 billion U.S. advertising market overall,” Lawrence said. “Because that second smart screen that’s our secret sauce allows us to deliver performance-based advertising. So we’re going to be bringing in search social into the TV ecosystem that have never before been able to be there because we run the entire operating system of both screens.”

If you want to buy the pizza you see in an ad on the lower screen, you can click on it and then order it and Telly will handle the transaction, Lawrence said. There’s a real value exchange when you provide people with a television, and so people will reveal more things about themselves to get that TV. This is where people opt in and say how many people are in the house, which brands they like, how often do they eat out, what are their favorite sports teams, and whether they travel or own a house.

The answers, which people willingly provide upfront, can help generate a more relevant advertising experience, Lawrence said.

“If you tell us you eat out three times a week, you might get some content that says ‘Hey, click here and get $3 off your next purchase.’ That means that the ad unit’s CPM (cost per mille) is exponentially higher than a traditional ad unit because it is performance driven and deeply built on data. And it’s not super nosy data that Telly is going to collect, as it will be compliant with California’s strict privacy law.

“The difference here is Facebook scraped the data and collected it,” he said regarding user privacy. “We are at the very beginning giving you a survey and saying, as part of the value exchange, answer these questions and you get a TV. If you don’t want to answer the questions that have been shared with advertisers, then you don’t have to get a free TV.”

Another revenue stream comes from data licensing. Since Telly has a lot of data that has been freely given to it, it can do things like detect how many people are watching at a given time. And Telly has signed several licensing agreements for that data. And still another source of revenue comes from affiliate revenue. If it drives revenue for FanDuel’s sports wagering apps, then it gets a cut of that revenue.

Lawrence said testing is already under way in a number of homes and it’s going well, Lawrence said.

“We are very confident in the ability for this TV to drive the kind of revenue we anticipate,” he said.

Lawrence said, “For the lifetime of the company, every unit is free forever. We will deliver 500,000 units in 2023. And then we scale to multiple millions in 2024 and beyond. You get this. There is no better price point. And the added benefit is the value exchange doesn’t end on day one.”

The company will launch Telly rewards in the summer, where users will be rewarded for their engagement. Advertisers that send polls will give you points if you engage with them.

“Those points can be rewarded for you like a free pizza or free Starbucks gift card or Amazon gift card,” he said. “So it’s designed to be the TV that gets better every month and your house combines all of your smart devices in one place. And continues rewarding for the lifetime.”

Brave investors?

Telly closed a seed round in the first quarter. And the investors are bullish.

“While everyone talks about Smart TVs, the reality is that TVs have not changed dramatically over the past couple of decades and the dream of truly interactive TV has never materialized,” said Richard Greenfield, general partner at LightShed Ventures, who co-led Telly’s latest funding round, in a statement. “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. 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.”

Viewers can watch anything on Telly, from their cable or satellite TV provider to their favorite streaming app, by connecting through one of three HDMI ports built into the television or through the built-in TV tuner. Telly ships with a 4K Android TV streaming stick. Users are also able to connect their favorite streaming service or device (Roku, Amazon Fire Stick, Apple TV and more) to take maximum control over their TV viewing experience.

“We built our business by leaning into the trends shaping the future of consumer entertainment and brand engagement,” said said Gary Vaynerchuk, CEO of Vayner Media, in a statement. “Gen Z and younger millennials live their lives today across multiple screens and only Telly unites those experiences into one incredible product offered at the perfect price point of free. We are thrilled to be an early launch partner with Telly and help our clients create an entirely new form of brand engagement that is truly valued by their consumers.”

“Television is the most powerful medium in the world, and MNTN’s clients know it,” said Mark Douglas, CEO and Founder of MNTN, a Fast Company 10 Most Innovative Companies In Advertising for 2023. “In today’s fragmented media landscape, we are always eager to identify breakthrough opportunities to reach new audiences, and now 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, a free Ad Supported TV just got real. Literally.”

Telly was started in May of 2021 and has attracted the best and brightest leaders from across the media, entertainment, advertising and consumer electronics sectors to its mission to deliver the ultimate television upgrade for the living room, for free, all supported by advertising.

Leaders from Apple, Google, Amazon, Netflix, Vizio, Samsung, Roku, Comcast, Pluto TV, Sony, DIRECTV, and Nielsen have come together to launch Telly.

“We couldn’t be more excited to introduce the world to Telly,” added Pozin. “Don’t be fooled by the free price. This is by far the most advanced television ever developed. Consumers will never look at their television the same way again after Telly transforms the TV from a monitor on the wall into the most powerful and useful device in the home. Telly is the ultimate free upgrade that actually gets better month after month with over-the-air updates constantly innovating the living room experience. There has never been anything like it before.”