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Telly, A Start-Up Led By Pluto TV’s Co-Founder, Offers Dual-Screen Smart TVs For Free – Deadline

Telly, a startup led by a co-founder of Pluto TV, is taking a novel tack in promoting its dual-screen smart TV sets.

After emerging from a 24-month stealth period, the company says it will offer its first 500,000 mass-produced models for free to consumers when they start shipping this summer. Ilya Pozin, founder and CEO of Telly, told Deadline in an interview that the 55-inch sets, which have 4K HDR picture quality and a built-in premium sound bar, would retail for more than $1,000.

Telly says it is bringing to market the first dual-screen smart TV. Below the main panel, a smaller screen is a conduit for sports scores, news, weather, display ads and other supplemental information. The bottom screen can also go dark, for example when a movie is playing on the bigger screen.

The free giveaway is an effort to upend the prevailing business model in streaming and have advertising more completely fund the device itself. “TVs have become a commodity,” Pozin said. “When a category becomes a commodity, what happens? It’s a race to the bottom on price. There’s very little margin to be made on the hardware.” Over time, he went on, smart TVs became “drastically under-powered. They’re the largest screen in our home, but they are as dumb as an ATM machine.” Instead of setting out to make a bargain-priced TV, Telly has targeted the higher end of the market. After the rollout of the 55-inch set, larger sizes are expected to follow.

Investors in Telly, which launched two years ago, include LightShed Partners and Vayner Media, and Ryan Reynolds-backed connected-TV ad firm MNTN has formed a partnership with the company. Principals have not said exactly how much money they have raised, though they say Telly’s post-raise valuation will be in the nine-figure range. The hope is to emulate the trajectory of Pluto, which Pozin founded with Tom Ryan in 2013 and sold to Viacom six years later for $340 million. While the acquisition price seemed hefty at the time, it has turned into a steal as Pluto has become a multi-billion-dollar pillar of Paramount Global’s streaming portfolio, which is now overseen by Ryan.

Mindful of the challenging economics in the hardware business, smart-TV players like Samsung, Vizio and LG have pivoted toward free, ad supported streaming television [FAST]. Telly’s strategy differs from theirs in that it is not promoting its own streaming ecosystem. Instead, it is meant to be a living-room hub for thousands of apps — video streaming, of course, but also videoconferencing, music, fitness, gaming and other categories. A video chat feature enables the lower screen to gather a group of friends or family and synchronize their collective viewing of a game, event or movie on the main screen.

Numerous times during a 30-minute demo offered to Deadline in New York, Pozin referenced the iPhone, saying Telly’s goal was to be as disruptive to the streaming marketplace as Apple’s device was when it was first introduced. Once-essential items like digital cameras, GPS devices and others were instantly made obsolete. Instead of fiddling with their phones, Telly believes, viewers will be able to access an array of supplemental information without turning their focus to another screen. That extra degree of attention is worth a lot to advertisers in the fast-growing but distinctly fragmented streaming ad sector.

Of course, there will be tradeoffs made by those signing up for a free Telly in terms of agreeing to surrender certain data, but Pozin said the company has made an effort to prioritize consumer privacy. The smart-TV sector has seen other violations over the years Vizio in 2017 was fined $2.2 million after federal regulators found the company’s data practices were deceptive. TV data firm Alphonso also was reported to be accessing viewers’ audio inputs without sufficient disclosure.

“Everything is very transparent with our consumers,” Pozin said of Telly. “Everything is opt-in. We don’t bury things in long terms-of-service agreements. You know exactly what you’re getting into. We stay above-board.”

Any cable or satellite TV input can be connected to Telly via its three HDMI ports. The set ships with a 4K Android TV streaming stick. Users can also plug in a connected device from Roku, Amazon Fire TV, Apple TV or other providers (another point of difference with existing smart TV makers, who are focused on keeping viewers within their operating system).

“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 and a veteran media analyst. “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.”

Vayner Media CEO Gary Vaynerchuk said he believes Telly will help his firm’s clients “create an entirely new form of brand engagement that is truly valued by their consumers.” Mark Douglas, CEO and founder of MNTN, sounded a similar note. “Brands will be able to seriously level up their performance marketing strategy — right there on the biggest screen in the house,” he said.

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