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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.
Most of the time you can opt-out. Nothing forces you to plug your "smart TV" into your network. Use it as a dumb monitor and take your $200 subsidy.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
All TV's are dumb panels until you connect them to the network. You don't have to pay more, let all the other idiots subsidize the price with their personal data
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.
6 percent margin is plenty for a mass manufactured product. The tech industry is so greedy.
Bullshit, you can't opt-out unless you're living completely disconnected in the woods somewhere.
I've opted out of EVERYTHING possible on my Samsung JS9000 - a $2500 TV when launched - yet I STILL get ads, and I KNOW that it's sending information somewhere despite opting out. Samsung customer service says they can't help me, even after showing them pictures of the ads on my screen.
Don't Plug your TV into your network? OK, but then I'm stuck with my Xfinity box spying on me.
Don't use Xfinity? OK, then what, plug it into my laptop so that all of the same programs (Hulu, Netflix, Prime, Vudu, etc) can still spy on me, not to mention Microsoft, Google, etc?
The problem is that the devices we purchase - phones, TVs, computers, cars, etc - are not ours any longer. We're paying to be spied on.
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.
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.
I'll hold your hand for you if you want, but I think you are just being difficult. You don't like the strings attached to the services you are addicted to. You are opting in to Comcast's business model because you can't stay away from their content. That's on you, not them. I won't judge if you unplug Xfinity and use Kodi, or torrent or usenet, or... Or stay legit and go to the store and buy DVDs/BluRays. Or watch OTA programming.
Point is, you can absolutely make your smart TV into a dumb TV - you just don't want to because you like the other side of the contract. If a "dumb TV" were available you wouldn't buy it, because it wouldn't offer the features you are willing to trade privacy for.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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".
A TON of people are not setting up their WiFi on those people, not because they care about data sharing but because they simply don't know how or understand why.
Many people in my family ask me to come hook up their Roku Stick when they just bought a TV with a Roku app built-in and in some cases they end up giving up completely when it involves buying and setting up another router or extender to get signal in their bedrooms.
Of the people that buy smart TV's, I wouldn't be surprised if many don't ever get setup correctly, hence why most come pre-loaded with ads even before you connect to the network.
Custom electronics and digital signage for your business: www.evcircuits.com
Why not take a creative hobby, or go out walking or read a but or get a pet instead of watching TV so much?
-- Cheers!
Well it is the problem in general with protesting modern tech. Nobody wants to inconvenience themselves. They just want an external entity to force the company to do what they want.