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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.
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.
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.
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.
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.
As for razors, get the ones with 2 blades, not the 4 blades they push nowadays. The 2 blades kind stay comfortable for waaaay longer for some reason.
Smart TVs... yeah I hate being spied on. They are obviously making way more money than they let on, otherwise they wouldn't have bothered.
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".
And you found the dumb TV where? I haven't seen a dumb TV bigger than the 32-40" class in years, and even there it's becoming hard to find if you want a decent display.
Newegg was my second google result for "signage lcd", which I figured would get me some hits. I went for "commercial lcd" on amazon and eBay with good results as well.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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.
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.
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.
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