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Taking the Smarts Out of Smart TVs Would Make Them More Expensive (theverge.com)
In a wide-ranging interview, Nilay Patel of The Verge speaks with Bill Baxter, chief technology officer of Vizio, about what the company thinks of some TV vendors adding support for Apple's AirPlay 2, and other things. A remarkable exchange on the business of data collection and selling: Nilay Patel: I guess I have a philosophical question. You guys are committed to low price points and you often beat the industry at those price points. Can you hit those price points without the additional data collection that TV does if you don't have an ad business or a data business on top of the TV?
Bill Baxter: So that's a great question. Actually, we should have a beer and have a long, long chat about that. 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.
And then I need to make money off those TVs. They live in households for 6.9 years -- the average lifetime of a Vizio TV is 6.9 years. You would probably be amazed at the number of people come up to me saying, "I love Vizio TVs, I have one" and it's 11 years old. I'm like, "Dude, that's not even full HD, that's 720p." But they do last a long time and our strategy -- you've seen this with all of our software upgrades including AirPlay 2 and HomeKit -- is that we want to make things backward compatible to those TVs. So we're continuing to invest in those older TVs to bring them up to feature level comparison with the new TVs when there's no hardware limitation that would otherwise prevent that.
And the reason why we do that is there are ways to monetize that TV and data is one, but not only the only one. It's sort of like a business of singles and doubles, it's not home runs, right? You make a little money here, a little money there. You sell some movies, you sell some TV shows, you sell some ads, you know. It's not really that different than The Verge website.
Patel: One sort of Verge-nerd meme that I hear in our comments or on Twitter is "I just want a dumb TV. I just want a panel with no smarts and I'll figure it out on my own." But it sounds like that lifetime monetization problem would prevent you from just making a dumb panel that you can sell to somebody.
Baxter: Well, it wouldn't prevent us, to be honest with you. What it would do is, we'd collect a little bit more margin at retail to offset it. Again, it may be an aspirational goal to not have high margins on our TV business because I can make it up downstream. On the other hand, I'm actually aggregating that monetization across a large number of users, some of which opt out. It's a blended revenue model where, in the end, Vizio succeeds, but you know, it's not wholly dependent on things like data collection.
Bill Baxter: So that's a great question. Actually, we should have a beer and have a long, long chat about that. 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.
And then I need to make money off those TVs. They live in households for 6.9 years -- the average lifetime of a Vizio TV is 6.9 years. You would probably be amazed at the number of people come up to me saying, "I love Vizio TVs, I have one" and it's 11 years old. I'm like, "Dude, that's not even full HD, that's 720p." But they do last a long time and our strategy -- you've seen this with all of our software upgrades including AirPlay 2 and HomeKit -- is that we want to make things backward compatible to those TVs. So we're continuing to invest in those older TVs to bring them up to feature level comparison with the new TVs when there's no hardware limitation that would otherwise prevent that.
And the reason why we do that is there are ways to monetize that TV and data is one, but not only the only one. It's sort of like a business of singles and doubles, it's not home runs, right? You make a little money here, a little money there. You sell some movies, you sell some TV shows, you sell some ads, you know. It's not really that different than The Verge website.
Patel: One sort of Verge-nerd meme that I hear in our comments or on Twitter is "I just want a dumb TV. I just want a panel with no smarts and I'll figure it out on my own." But it sounds like that lifetime monetization problem would prevent you from just making a dumb panel that you can sell to somebody.
Baxter: Well, it wouldn't prevent us, to be honest with you. What it would do is, we'd collect a little bit more margin at retail to offset it. Again, it may be an aspirational goal to not have high margins on our TV business because I can make it up downstream. On the other hand, I'm actually aggregating that monetization across a large number of users, some of which opt out. It's a blended revenue model where, in the end, Vizio succeeds, but you know, it's not wholly dependent on things like data collection.
How much money DO thwy make after purchase?
If it's 200 on a 1200 appliance, I'll gladly give yoi 1500 to just give me a dumb panel and fuck off.
The WORST thing I did with my Samsung TV (bought in late 2014) was to let that thing connect to the internet. Every "automatic" firmware update that it did, made it unquestionably worse and added bloat that I NEVER use. It takes longer and longer for the TV to "boot up" now, and occasionally starts one of the useless "Apps" by mistake. It would also put nag-overlays on the screen when it wanted to do updates, or log into accounts, or other irrelevant crap.
If I knew how to easily "downgrade" the firmware to the original version, I'd do it.
The TV will always be a dumb display n my household!
If throwing an embedded comp. with a stripped down Android (?) and Internet Apps makes it cheaper, that's fine.
However, the moment TV's are then required to be 'online' to just simply function, is the day that TV vendor dies.
I have a nice 50 (or mayr 55) HDTV. I ewas frustrated by the mandatory software updates the TV woud do randomly when I wanted to turn it on. SO, I simply unplugged it form my internet and now I have a great TV the is not collecting any data. No "software update" in the least 5 years. Basically, it is great monitor to watch DVDs (thank you Netflix) and run an HDMI for whatever screen I device I want it to show It is too much for us to all become data-producers every time we make a purchase.
Give me analog in and out, digital in and out with CEC/ARC that lets me use any device in the HDMI chain as the driver (ie the TV is not forcing itself as the hub) and a great panel. Don't even need speakers, or a tuner. Ill hook it up to a sound bar/receiver system of my choice and a streaming box of my choice. Just a monitor thanks.
They would absolutely go for both high margins and post-sell monitization. Also, only one TV maker would sell TVs in your city.
They would also lobby to make it illegal to go to a different city to buy a TV as well as mandatory to actually set up the WiFi on your TV. Actually they would probably just remove the HDMI inputs to "better serve you"
What real consumer benefit? Not having to type the movie name into IMDB to see who that character actor is? Is that really worth Visio knowing every fucking thing I watch?
"Bill Baxter: So that's a great question. Actually, we should have a beer and have a long, long chat about that."
I knew we'd be hearing "Asshole-speak" and I was right. I'll never use that crap.
Then how can Sceptre sell 4K "dumb" TVs so cheap? I bought a 50" UHD TV for $299. You can get these at Walmart and Amazon, among other places.
http://www.sceptre.com/store/TV/4K-UHD-TV-category1category73.html
Learning HOW to think is more important than learning WHAT to think.
6 percent margin is plenty for a mass manufactured product. The tech industry is so greedy.
What happens if you never connect it, or just connect it long enough for a firmware update then firewall it off so it may be "on" the local network, but cannot get to the public Internet?
I assume they don't make money in that case?
This sort of business strategy is as old as the hills. I'm not sure why this particular example is all that surprising or reprehensible. Savvy consumers can beat the system in other areas by, e.g., reusing razor blades much longer than the manufacturer intended or refilling toner cartridges, and here it's even easier -- they can just not use the "smart TV" functionality.
A very good example of this. Any answer that starts with "this is a great question" is usually the only part of the answer that's honest. It is a great question, and an uncomfortable at that, because it puts the finger exactly on what we do not want to answer.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I don't doubt making them smart makes the cheaper to purchase -- because you become the product they're selling to someone else. But the idea that they'er so well made. Maybe 11 years ago, but I've taken them apart and their build quality is crap.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I bought a 50" Sceptre tv for under $200 for during black friday. It's light, thin, and starts up really fast. Not like my Smart Sony that was expensive, heavy, thick and takes forever to boot up the "smarts". Just buy a dumb TV and make it smart. You can't upgrade smart TVs so they get stupid fast.
There already exists this market that people want for a "dumb" tv. A commercial or hospitality display, you can turn any feature you want completely off. They are of course, more expensive, but usually meant to be run 20 hours a day or more, so better components too.
And of course, nothing says you have to connect it to the network ever.
As a potential lottery winner, I totally support tax cuts for the wealthy
Then how can Sceptre sell 4K "dumb" TVs so cheap?
Because they use cheap panels. Vizio regularly tops reviewer's image quality lists. And, as the Vizio exec said, they tend to last a long time. My friend bought a Vizio back when they were making decent quality TVs for *very* cheap prices, and it's still going 10 years later.
My Other Computer Is A Data General Nova III.
My background is in TV SoCs, so I can definitively say that this whole industry has been a very low margin business for years. Mr. Funai, who ran the Funai brand that owns Sanyo and Magnavox brands, used to negotiate with us and was taking off fractions of pennies for certain features. That was over a decade ago...
/.ers, will simply not connect our TVs to a network and use our player of choice, like Kodi on a Pi3 or HTPC, plus an antenna for the tuner. Today's ATSC tuners will go the way of the dodo, and in a few years they will be relegated to having a 16:9 SD-ish signal of a limited number of channels for a few years until they shut that off and ATSC 3.0 becomes your only choice. Even tuners will not be protected long-term, as various sub-committees in ATSC, EBU and others are talking about having a 5G modem in displays and set-top boxes to collect viewer information using some IoT stack even when not connected to the user's network. It won't matter if there isn't PII, as statistical correlation and deep learning with this and other data (e.g. mobile network location) will be enough to pinpoint not only your house, but who is viewing what at a given time.
SoCs have changed a lot since those days (waving at DivX). Yet the most important features of the last decade driving increased margins from a pure display perspective are HDR / wide color gamut, quantum dot and OLED, and even those TVs are starting to become more "mainstream" in some respects.
The other half of this is streaming services, and this is what modern SoCs can finally provide. While boxes like Roku were predicted to go the way of the dodo and haven't, most brands have an app platform that supports not only streaming media, but analytics (read: data collection) as well. Some set-top boxes / streaming players (and I increasingly suspect TVs) have microphones to collect ad impression information for advertisers, but the terms controlling this data collection will be buried in some contract of adhesion aka EULA you click through to get access. Even Android phones going by Cast devices or Apple phones going by AirPlay sinks can and often do collect this information today for Google/Apple. Remember that Vizio was already caught in a scandal fingerprinting image buffers once a second and sending that to third parties, so the flippant attitude of the interviewer is both humorous and frightening.
What the interview doesn't discuss is how far this will actually go. I, like many
As frightening as all of the above may be, it means we need to be vigilant. Security researchers need to keep on top of these privacy violations and monitor not only network traffic but wireless as well. When the 5G IoT data collection really starts rolling out, we'll have to look at the FCC filings for the devices and see which have these radios in them. I hope it doesn't get to the point where I have to start cutting traces and clipping MMCX antennas out of a display, but I'm ready to do it. We need to use privacy enhancement tools on more open platforms and at low levels of our home networks and reject the closed ecosystems and control of embedded devices. Most importantly, we need to be very vocal and very public in calling out privacy violators. Everyone is trying to establish economic rents, but it can't be at the expense of individual privacy simply because the inevitable data breaches will inevitably expose too many of us to unwarranted public scrutiny.
After their privacy invasive shenanigans were revealed. I just bought a 55" TV and did not even look at Vizio as an option. Also, I DID go for a dumb TV. BC
that's why iphones cost more than android spyware phones...
Low quality.
I'm still pushing a 40" Panasonic 720p plasma from I don't even remember when. 2011? It looks great and it still works as a TV.
How about a law that mandates that the "smart" part of a Smart TV be a distinctly removable and upgradeable module?
Simply removing it changes it into a Dumb TV. So you can get your Dumb TV as the lower price of a Smart TV.
Furthermore, the "smart" part, which becomes obsolete much faster than the "dumb" part can be replaced by simply swapping out modules if that actually becomes necessary.
Extra Credit: require an industry standard interface for how the smart module is connected to the TV so that all smart modules work with all TVs. Third parties (eg, Roku, Apple) could create their own module. Maybe the "industry standard interface" could be something called HDMI ?
I'll see your senator, and I'll raise you two judges.
For now that is. Right now, with the assumption that they gain by data sucking, I wouldn't be surprised to see TVs either having a 3D cellular modem, or just not working unless they have an always-on requirement to the Internet like game consoles do.
I wouldn't be surprised if the next upgrades, be it 6k or 3D, or whatever, required the TV to have an always on connection for DRM purposes.
you've seen this with all of our software upgrades including AirPlay 2 and HomeKit -- is that we want to make things backward compatible to those TVs
My parents bought a Philips "smart" TV. Within 6 months, the Youtube app (the only one they used) became useless because YouTube switched to a different encryption algorithm (IIRC) and we found out the TV wouldn't be updated to support this.
Still, smart functions only included to increase profit for the manufacturer? No thanks. So for my TV replacement, I'm looking at a computer monitor and an HDMI switch box with remote control. The "smart" part will be provided by a Mac mini that's under MY control. I'll have to test how well the HDMI switch will work though (given the problems caused by HDCP in non-standard use).
I'm wondering if anyone has ever successfully rooted a TV? I doubt these consumer grade devices could possibly have much in the way of security.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
The greater strategy is I really don't need to make money off of the TV . I need to cover my cost.
And then I need to make money off those TVs.
Emphasis added.
Yeah, no, fuck you ... it's my TV, you've been paid for the product, you have no further right to monetize a fucking thing from me.
I have a smart TV, it's never had a network connection and never will, I've never used any of the apps, it plays no role in changing of channels or volume ... it has a single HDMI input, is on permanent mute, and is just a dumb device.
The problem with all smart devices is the underlying assumption that they're going to collect and monetize your data.
If I bought a TV, and it couldn't work without a network connection, I would take it back to the store and say it's not suitable for the purposes and demand my money back.
I swear, the modern idea of a business model is "be as much of an asshole as possible".
Two smart TV reviews I recently read: One had a minimalist remote, which was mostly just a microphone for telling the TV what to do. Another review, which was for a Visio, was from an angry customer who had opted out of data collection 6 months prior when he bought the TV, but a software upgrade pushed a new data collection option, which he said could not be opted out with the included remote!
Why are you rebooting your TV so often? It will sit in standby forever, instantly ready to come on.
A TV unplugged from mains does not draw vampire power. Let's say you've used a Kill A Watt meter to determine that each of your devices draws 1 watt on standby. Over a year, each device draws 8.766 kWh, and at $0.114 per kWh, that's a dollar per device per year. Multiply that by all the devices you leave on standby, and consider how much you could save by switching off the outlet when the device is not in use.
"waiting to boot up the TV"
LOL- This takes me back to the old days when I had to wait for the picture tube to warm up* before anything would be shown on the display. People who grew up with all vacuum tube sets had to wait for everything to "warm up" before they would even get audio!
*the filament in the little vacuum tube at the back of the CRT had to reach a certain temperature before the CRT would work. Some of the higher end sets would keep this filament powered even when the rest of the set was 'off' so the picture would come on instantly when the set was turned on.
If you buy a computer monitor, that is about as dumb a "TV" as you can get. Unfortunately they are more expensive than a TV just as the guys says. I got a 27" monitor for around the same price as I got 42" television. The monitor has better display of course but watching videos and such it looks about the same.
Buy lots of TVs and return them when they don't work.
And risk getting banned from shops as a so-called "demon customer". (Source: "Best Buy Says Customers Not Always Right")
It's about post-purchase monetization of the TV.
I think market forces just jumped the shark. Do not want.
If manufacturers have an interest in monetising smart TVs, why are they so ugly, so hard to use, and so featureless after just a few years?
While I understand the position presented here, I see no evidence that they are actually putting in the effort.
Just buy a decent PC/HMDI monitor & plug in a media box, e.g. Android, Raspberry Pi, or Roku. Or you could try *never* giving a smart TV access to the internet & just put up with the stupid menus that get in the way of watching TV. As far as I can tell in the consumer electronics industry, "smart" = "optimised for surveillance." Do you really want to let advertising scumbags into your living room?
Debate is a form of harassment. Do not question my truth.
I don't know why someone hasn't come up with some open-source firmware for so-called 'smart TVs' to remove all the 'smart' nonsense and just turn them into plain-old TVs.
I just bought a 75" TV last week. I chose a Sony because it's the only major brand that didn't include on-screen advertising. I figured I was overpaying $200-400 compared to Samsun or Visio, but showing ads is a hard deal-breaker for me.
This is also the first Sony product I've bought since the rootkit fiasco.
I absolutely would have paid another $500 above what I did for a dumb version of the same TV. I was seriously considering buying a commercial display but it was about 3 times the price, that was just too far to go.
It's not 4G, it's the fact that the next gen of OTA data specs include setting aside bandwidth for broadcasting of data back to the broadcasters. It's not going to be a generic 4G, it's going to be dedicated frequencies for ads and data collection (and, as a bonus, enjoy the worse video quality OTA!) There won't be monthly fees for the TVs, they'll literally be a bidding war for Sony's data (on you and their other customers) among Fox, ABC, CBS and NBC.
Your ad here. Ask me how!
I remember when I worked in a television repair shop in the late 70's, as everything was transitioning out of vacuum tubes to solid state tv's, we would ROUTINELY repair 10-15 year old TV's, replace the HUGE & heavy glass CRT's. My parents had a Zenith 19" color tv that lasted almost 25 years, and their 25" Zenith console TV lasted over 20.
Automatic death sentence for the board of directors for data breaches (after all they already get paid a huge amount because of the "risks" of the job)
That is the ONLY way that these companies will ever decide if they REALLY need that information, how well they protect that information, how long they keep that information.
It would not cost more to produce. You just don't like the thought of loosing out on the revenue that smart TVs can generate over the lifetime of the product. Dumb TVs only get paid for once, but with the data collection, you earn revenue for as long as it's in use. Selling dumb TVs doesn't make the TV cost more, it means you don't profit as much. Not the same thing, from the consumer side of the issue.
And it's still stupid that my fully-functional TV becomes obsolete just because you no longer support the hardware platform you installed in it 2-3 years ago, making it even *more* of a security problem for the consumer.
CyberKender
Apparently Appointed Lord Mayor of There
It is not the actual cost, it's the fact they monetize your viewing to deliver ads to you.
Just say no.
-- Tigger warning: This post may contain tiggers! --
TV? Get a projector already.
Why in 2019 would anyone buy a TV when a $500 projector does so much more and doesn't spy?
"Smart features which allow the device to sell your data to other companies, subsidizes the cost of the device and reduces the price"
Fixed it for you.
"Taking the Smarts Out of Smart TVs Would Make Them More Expensive"
Right, because including fewer parts and capabilities always costs more, right?
Seriously, GTFO here with that bullshit.
Just cruising through this digital world at 33 1/3 rpm...
That's total BS, there are still dumb TVs available and they do, indeed, cost less than comparably sized smart TVs at the same resolution. I just bought a 50" dumb TV (I have no desire or need for a smart TV), 4K, and it well under $300. Any comparable Smart TV I came across while researching was more than that, usually be at least $100, often by a much wider margin that that.
Oddly enough I just installed a 43" Samsung "Full HD" 5 Series N5000. Canada, went to Wal-Mart, Paid $700 taxes and fixtures.
No nothing except built in speakers, two HDMI ports, an optical port and a USB port to play movies (it seems to only like a few of my movies, which is fine, I have a BD unit it will be hooked up to).
Nice to buy something without built-in Alexa (which most of the other models seemed to have; this is more of a commercial unit I suppose and they will always be bloatware-free models).
I don't have access to that data either, but I can say with 100% certainty that your issue, and the issue with damned near everyone using a CPAP, is YOU ARE A FAT BASTARD AND NEED TO PUT THE MT DEW DOWN.
I bought a Vizio E-series 2016 for my father. Perfect dumb tv and was on the shelf at his local Walmart. (previous E series were smart). Probably $100 less than a smart TV. These TVs were unique in that the only smart features were provided via built-in Google Cast. So pretty much beam apps from your ipad, including a custom vizio app. Otherwise nothing smart -- no netflix, amazon, nothing. Using Google Cast worked great for me visiting, but was beyond his capability. He just wanted a dumb TV to watch cable TV on.
In 2017, Vizio changed strategy and announced a free upgrade for all 2016 E Series owners. To the "full" Smart TV package on almost every Vizio. And now his "dumb" TV is getting Airplay 2. I didn't realize until this article that this "free" upgrade was just another shot at monetization -- artificial price differentiation to make the sale (since obviously the smarts were in the original TV), then give the smarts free to those who didn't pay for it to unlock the third party revenue stream. Impressive.
I'll take two.
I will never have a TV that connects to the Internet. I am even getting suspicions that modern TVs may even be equipped with cellular modems for side-channel communications in case Internet is not available. A telemetry rate plan is typically about $1/month for up to 10MB of data, so it would be cheap data collection.
So, I just buy large monitors - no smarts. No nothing. My Vizio tv happens to be a 2008 model. I've taken it apart twice to repair it. It's LCD, so it takes 400W from the wall, but I don't care. I've looked through it and there are no radios. No spying that I can see.
This is a case where someone wants to explain both sides of an issue and go into the nuance so that the person asking the question knows why things are the way they are
No this is a person who is trying to justify predatory bullshit for his personal enrichment with more BULLSHIT! The correct answer to the question would have been a succinct: YES or NO The interviewer didn't ask for a lengthy explanation of why, he asked; can you or can you not?
Everything else is hand waving and bullshit. People don't want to hear political bullshit. Mealy-mouthed bloviating with the specific purpose of being disingenuous and hiding their true intentions.
I bought a 55 inch Vizio "Smart" TV a few years back. The picture quality was great. I didn't want the "Smart" features, so I blocked the MAC address of the TV on my router, rarely unblocking it to get firmware updates.
The Vizio's firmware was so buggy. The TV would turn itself on overnight. I would wake up the next morning to find that it was on. I knew I didn't turn it on, because when this would happen the remote control would not work. I would have to unplug the TV and plug it back in to make it work right again. This happened at least 4 or 5 times over about 2 years. Luckily I wasn't on vacation at those times.
I used an antenna to get TV signals. When one channel would have a weak signal, instead of just blanking the screen or putting up a message like "Weak Signal", instead the Vizio would change the channel across the dial. Going from something like 45-3 to 12-1! Even when I would hide channel 12-1, the Vizio would switch to that channel and unhide it from my channel list.
I called Vizio's customer support. The idiot on the other end of the line falsely claimed that Vizio had no control over what its firmware did! He knew that there are physical frequencies, but he could not figure out that those frequencies are mapped onto logical channels, like 45-3 or 12-1. The Vizio CSR correctly told me that when my TV switched from 45-3 to 12-1, that it was going to the next lower frequency which had a good signal. But I told him that the firmware SHOULD either change to the next logical channel or better yet not change the channel at all. He still insisted that Vizio could not make their own freaking firmware do that!
What's worse is that this stupid Vizio CSR then kept trying to sell me a new Vizio TV which he insisted would have better firmware!
I didn't pay Vizio money for a beta TV. Vizio sucks. Don't buy Vizio.