Geeks often ask for dumb TVs. But, as the CTO of Vizio recently explained, smart TVs are cheaper than dumb TVs. TVs are so cheap that manufacturers make their profit by tracking your viewing habits and selling ads.
Why Smart TVs Are Cheaper Than Dumb TVs
You’d think a dumb TV would be cheaper than a smart TV. After all, a dumb TV wouldn’t need the processing power and specialized software found on a smart TV. It could just act as a panel (like a computer monitor) and let you hook up devices via HDMI.
So why is every TV becoming a smart TV?
The Verge talked to Vizio CTO Bill Baxer at CES 2019. He spilled the beans:
So look, it’s not just about data collection. It’s about post-purchase monetization of the TV.
This is a cutthroat industry. It’s a 6-percent margin industry, right? I mean, you know it’s pretty ruthless. You could say it’s self-inflicted, or you could say there’s a greater strategy going on here, and there is. The greater strategy is I really don’t need to make money off of the TV. I need to cover my cost.
This isn’t all bad. He goes on to explain that Vizio is investing in its old TVs and updating them with new software. For example, Vizio TVs going back to 2016 will be receiving AirPlay support. And advertising is just one part of the business model, which also includes money from movie and TV show rentals initiated from the TV.
Automatic Content Recognition Tracks What You Watch
If you never use your smart TV’s software, you might think it isn’t tracking you. You use a set-top box or streaming stick like a Roku, Apple TV, Fire TV, Chromecast, Android TV, PlayStation 4, or Xbox One. So your smart TV’s built-in software can’t track you—right?
Wrong. Modern smart TVs use a technique called “automatic content recognition,” or ACR. When you watch something on any device plugged into the TV—yes, even if you have a device plugged in via HDMI—the TV captures some pixels from whatever you’re watching and uploads them to the TV manufacturer’s servers. The servers can match that to a movie or TV show. The TV manufacturer now knows what you’re watching, and it can sell that data to marketers and advertisers.
