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Welcome to the verge cast the flagship podcasts of the second screen experience. I'm my friend David piers, and this is the first episode in a new mini series. Were doing about connectivity. But I don't mean connectivity in the like five g will change everything sense or the left test some wifi speeds sense. Either those are fine, but that's not what we're talking about for the next four mondays.
We're gona talk about how we connect online, how we connect to each other, how we connected the stuff that we care about, how we make connections that are private and personal and safe and make sense. It's a big digital universe out there, and connecting all of IT and us is hard but important work for our first episode. Gona talk about content.
Obviously, the internet completely change the way we watch, listen, read and everything else. I mean, really IT wasn't that long ago that the only way to access something was to get in your car and go to a store and buy IT. Now the whole universe of content is available from your phone.
You don't even have to get up off the couch, but that has a done set of chAllenges. We're all signed up for a million increasingly expensive subscriptions. We spend way too much time scrolling through streaming services.
Instead of actually watching the content on them. You're stuck upgrading your T, V, your phone, your everything every couple of years just to keep up with at all. I'm pretty sure making you go to black buster and say i'm goody back in the day was not the perfect solution, but i'm not sure this is either. Over the last few years, i've talked to a lot of people with ideas about how the content ecosystem might change, but I don't think i've met anyone with ideas quite as big and quite as wacky as this guy.
The opposition on the founder and CEO of telly.
Telly is a new start up like IT hasn't officially launched any of its product. But I think you might have heard of IT. It's the one promising to give you a free 50KT， V with a second screen below IT that telly thinks that can sell ads and apps on to make up for the money.
IT loses by giving you A T V. Telly is either the best or the worst idea i've heard in a really long time. And I since cereal, don't know which one is.
Before he founded telly, ellia also founded plue D O T V, which was one of the first and is still one of the most successful at based streaming services. His big idea was, people don't have infinite money to pay for streaming. Let's make one for free.
And IT worked. There's a lot of similarities between those two companies and those two ideas. And there's a bigger vision in there for how ela sees the world and how he thinks he can change both the TV hardware and the T V show business. That is what we're going to talk about today, the future of the biggest screen in your house and the way that we find and connect with the content we care about. But before we get into that, I wanted to start the conversation with alia by going all the way back to the pluto days.
So back in two thousand and thirteen, when we saw the entire kind of streaming ecosystem change, right, everyone started going on television to open up their apps, right? You had publishers like netflix that went from mobile and dust up environments to to the T. D. right? And yeah, the idea that everyone was launching with subscription services was great.
But there was an opportunity, I believed to, to have a free television experience, like when you went on youtube that was free, right? You were able to browse various videos, but there was nothing, no curated experience, nothing that felt like TV, nothing that serves you up content when you didn't actually want to think, right? And we always had the theory, pluto, where from an on demand perspective, on demand is really, really good if you know what you're looking for.
But if you don't know what you're looking forward to a horrible experience, right, how how do you search for something what you don't know what to search for? So that was the theory behind pluto. S can we create a lenie television experience and delivered completely free, right? Can we go out there and fine content that maybe isn't on maybe third one or ford winter, right, isn't on television anymore and isn't being monotoned anymore.
Um but it's still valuable and people still want to see IT. And and can we we create a revenue model may be a ref share time deal similar a youtube play with short from videos, but we do that with a long from content and and and we create this kind of TV experience. We did just that right? Initially, we launched a web mobile, but very quickly we built and experiences step on television. We quickly became the number one three APP on platforms like roca and names on fire, T. V.
And so for so, is that two separate insights, the idea that there is a way to do this without charging a subscription fee and people need something that isn't quite linear TV, but also isn't quite on? And is that two separate things that you build t the company on? Or is there an overlap of that then diagram?
There was two separate things, but they kind of converge, right? So the idea that cable companies were double dipping where you were paying for a cable subscription fee and then you were watching content with advertising, that mean that to me was was always one of those kind of mine bugling.
In the instances that that was right for disruption, we prove that at pluto, right where we said you can run a very sustainable business on just one one of those modification streams alone, right on just advertising in the feel of pluto u today, fast forward ten years, stand over a billion dollars and add revenue alone with eighty million plus consumers, right? So, and then the other was the curated lining AR TV experience, where you know that my original idea of puto was actually with my daughter sitting on my lap, and I was working on one monitoring. I was on youtube picking out kids videos in the other motoring SHE was two years old at that time, and I just learned how to changed diverse.
And I don't know anything about kids content. I didn't know what the search force. I was a guy.
Let me, let me try to find this kind of linear TV experience. We didn't like contempt, and IT didn't exist, right? That was original hypothesis.
So I built a prototype, I put that out there and then drove some users to IT right away. We saw like thirty six or forty minute session durations, and at that point youtube was getting three a half minute sessions, right? So we knew that the security experience worked.
And I said, okay, well, we were living in this air of court cutting, everyone's cutting the cord, the writings on the wall, right? Because consumers didn't want to pay twice, right? So can we create experience? Were actually monitise ed on a single remastering.
right? yeah. And I think one of the things that's been very funny since then is the world has kind of come around to that way of thinking, right? Everybody now has an ad supported thing, uh, as an ad supported tear of their subscription.
They still want to also charge you money for and also show you ads, which is funny, like work still in the old cable world. But also now we're in this place where this idea that it's hard to fines stuff to watch and actually maybe we should just create IT for you so that you can turn IT on. And like one of the good things about cable was channel surfing, like we got away from channel surfing for a long time and everybody d's kind of coming back to IT.
But ten years ago, I kind of feel like the industry thought you were just wrong, that like this was not the future you can make money and avoid. You can make money from curation on demand. Is the future like not a chance? And I overstating kind of the forces against you?
No, IT was spotted on for a long time. I don't think pudu was going to happen. I ve never felt so rejected in my life on all sides right from we went out to capital to get capital from investors.
I think we had ninety three notes before we had a yes, we because we're entering the market that seemed like IT was going subscription on demand and we said, no, we're going linear and ads supported and everyone thought that we're completely crazy. And also a lot of a lot of the people that are writing checks from an investment perspective, they have the means of the capital to go out there and paid for a service and remove ads. And they're like ads are bad, right? So so naturally, we just didn't didn't fit within that world.
And then on the other end, from the contempt spector, right, as you mentioned, all the content owners now all the media companies have had supported tears. But back then we went to, we went to them to get content and they also laugh the side room. We're we're licensing our content.
There's no we were given to on a raft share basis. And as important, forget IT where we're going subscription. So they thought we were crazy too.
What was the point? IT started to turn. Like, do you remember like a thing happening? We were like OK, we were not wrong about this.
Yeah I mean, so the data was there from the from the group, right? Where consumers showed us that they actually love this curated linear experience. And we were doing this would like two, three minute videos from youtube at that point, we were just short from content.
But when we stitched IT together until a long form experience, IT worked. And people love the whole channel surfing idea. They love the curation. They loved not thinking. And we even went like out of our way to remove the ability, like restart a show.
If you, if you came in the ato pm to pluto u, you watch the same thing at the same time as everyone else, even if he was, like four minutes into an existing clip, right? And we brought that kind of install c thing back and at work from a consumer side. But then I remember I think he was lying gate that gave us a chance, right, and said, I let's give you some older content.
We're not monotoned a currently. Let's put IT up there. We'll do a ref share deal and and lets see what happens. And we started writing bigger check.
And the bigger check we wrote, right, the Better the content they gave us, the Better the content they gave us, the more people watch. And we started getting into this, into the fly will, right? And then, you know, and then the industry kind of started to hear that, hey, like this is actually happening.
Consumers are growing, revenues growing. This is becoming a size opportunity. And others started giving us a chance, right once again, that started with older, older content. And then as the conscience got Better and you are everything I had started going up and the fly will started turning in a faster way.
So draw the line from that to telly for me because I feel like there's a bunch of like the market condition stuff you described in the like TV content industry that is also true of the T V. Set industry. You're also making a similar bet on ads verses money. But like how do you get from from pluto to telly?
Yeah yeah. No great question. So a pluto wheat partnered with every TV manufactured out there, right? Because and and then we saw they are writing on the wall. They they came to us and and we quickly realized they don't make any money selling TV, right? Like T I fit this commodity state where a there's no large in the hardware is a race to the bottom of Price.
And when you don't have any margin on the hardware, also have no innovation, right? So right now, when you're looking at A T, V in your home, i'm sure you have one in your wall and everyone else does. But you don't really know, is that three months old years and three years old ders have been there for ten years.
That looks exactly the same, right? And that's when one kind of the light head, if you are right, where if everyone's coming to us to get a piece of our ad revenue because they don't make any money selling hardware, right? And if you can't make any hard money saying hardware, why fight for that tiny margin anyway? Why not build a product in a way that you can give away and quickly take the market like we did with pluto?
So so just hang out, explained that part out really fast because if if I understanding you correctly, basically when you're at pluto, you're you know building and up for all these TV Operating systems in such. But part of the appeal of working with pluto to is that the T V manufacturers can figure out how to get a cut of your ref share. And that's the only way they're making any money.
And I actually feel like like I pauses on this because I think this is a part of the TV business. People don't understand that like there's money in outrageously expensive like hundred inch samsung televisions of little, but this like TCL behind me, like TCL not making any money. That's interesting to anybody on here. They're all making money on like the weird by where stuff that they put on and they're all making money on the ads that they show you, right? Like god is what the business has become, even fut of the people who make hardware related.
And it's no different than the double dii venture on the cable side right where right now TV makers are selling your TV. They're monitor zing your data, they're selling advertising. They're getting a cut of advertising from streaming services like pluto and and they're selling they they have their own programing now they're selling their own ads, so they're double different, right? So so once again, if you're in a business where.
You're not making money on the hardware. Simmer to pull up. We feel like if you can take away one of the revenue streams, you can quickly take that market. But you you're absolutely right as part of the deals will put on every TV maker got a cut of that revenue OK.
So then I can imagine the leap from there too. Well, if this is the business already, why don't we just make this the business?
That's right. That's right. And the the way we also look at is IT was very difficult to build pluto u for every TV manufacturer. And and that's because they are all trying to optimize the tiny amount of margin that had. So the processor, the memory, the stuff that goes inside the TV that's on your walling out is very weak.
And you know the way we looked at this is twenty, twenty three TTS are the biggest screen in your home, but they're the dome's. They're drastically under powered, right? There's very little that they can do to go beyond streaming, right?
Like you you even saw like netflix and others try to get into into gaming. And it's so hard to do gaming when when your processor is like as weak as an eighty m machine, right? So so when we looked at building telly, don't let the Price point for you, but free, right?
This is not a budget TV. We said, let's build, actually the smart is the TV on the market, right? So let's disrupt IT from A T, V perspective.
If we were to build a TV right now in twenty and twenty three, what would I do? And if you look at the market, look, look what to happened because TV have an innovator, right? There's no larger than invitation.
So there's been no innovation whatsoever. So what had happened? We had speakers pop out. We had assistance. We had, you know, myr come out with the fitness device for eight hundred dollars, which is literally a screen in the camera. All of these different devices popped up into the market.
And Frankly, we believe that a TV should have been doing that all a lot, right? And if there was any room for innovation and if TV companies were actually figure out how to drive an actual improvement of their product, rather, they're just making the screen theer or making a 4k to A K， I think this is, mister, what consumers actually want, right? And if you recall, when the iphone came out, IT killed a bunch of about their devices very quickly.
There used to be cameras at best buy. Those went away. Used to buy like a hometown or garden GPS that went away, right?
So like music players, port of, so the iphone killed a bunch devices. We expect the same thing to happen here, right? So telly is the smartest TV on the market, right?
It's got great speakers, right? You've got A A camera that that you do, zoom calling, fitness gaming, motion tracking gaming. It's got a full assistant built in so you can say, hey, ti put on spot fire whatever you want, your playing music through IT. Um it's got all your extra widget from like sports scores and news and whatever and and it's it's so much more than A T V right?
Imagine like somebody rings your ring doorbell, their video appears in the bottom or you do a zoom call with your family crossed town and their videos are on that bottom screen and you're watching the same, let's say, ootside all game on the top screen. And now you're watching together, right? And there's some really other interesting things that like we're building an innovating that goes well, well beyond beyond t yeah.
And I I I want to get to that in just a second. But I think the last version of the like why on three building A C V question I have is basically like the iphone example is really interesting, right? And I think where we are in the T, V market is essentially like deciding to build a camp quarter twenty years after the iphone comes out.
Like this market is dead, everybody agrees there's no money in IT. Everybody is like desperately trying to find something else to do. Like i've been a proponent the last several years of, like bring back dum tvs, right? Like I think there is a compelling case to make that all of the interesting stuff should happen in set up boxes, that should happen in sound bars, whatever, because you can buy a big display that is gonna keep being good for a very long time, put all the smart stuff somewhere else, and then upgrade the parts that you need. While this still very good for k display, gets to set on my welfare a decade, even though all of the part insider are going to become outdated.
So for you, even as you come in to the saying, you know, we wanted figure out how to disrupt the space, you look around, why build the set itself? There are so many other ways you could have attacked the TV market rather than building big screens. Why decide to build big screens?
yeah. I mean, I think you look when you look at the market, it's even from a stream perspective, it's so fragmented, right? And people are using different apps and different services and and cables kind of taking a nose die, right? There's people are switching up ht mysore and from gaming to everything else.
I think the the T V is really the the glue of the entire home, right? It's the the way you really connect not only all the Spark devices that are external, but also the family and and its it's where people stay together, right? People come home with their families.
They sit in from the TV. And it's kind of like the last part that keeps everyone together. And when you live in this kind of fragmented environment with country living in different places, there is a conflict of interest between the consumer and those ent owners because everyone wants you to be within their apps.
They don't want to promote other apps. But the one you know of switzerland, if you will, neutral place that, that can keep all those things together as the actual hardware and the television, right? So I think that's where we see the opportunities.
We can build a content recommendation engine that is a agnostic of of what services you are subscribe to, right? Um we can help you find content or or services that are like for you that based on your profile that are different than someone else. So I think that's really the the opportunity. And with with so many different options for hardware and different devices and smart home and I O T kind of growing and IT, once again, these different services, you need something that goes together and and the hardware and the kind of TV becomes that .
central point that makes total sense to me and I think is kind of the central question of telly for me, which I think is part of why this company is so fun because you're either dead right that this idea that the TV should be much more than IT is has only not happened because of essentially like lack of incentive and innovation or IT hasn't happened yet because you're wrong and smart phones are going to be that thing or glasses are going to be that thing or like a lex a everywhere is going to be that thing.
And essentially the tvs job is only going to become less and less over time, and only time will tell. But I think like for people who live in the world is actually one of the most interesting technology. Questions at the moment is like, what is the job of a television in the next decade? I think is such a fascinating question in a way that we've never really asked before.
Because the job of a television has been to watch things right, like IT was. IT was a funny piece that you watch stuffing. And then I became smaller and then I got a flat screen and they're got a highways.
But it's undammed tally like we watch shows and movies. And what you're talking about is like a fundamental, much bigger, broader, wider cool vision for what A T V could be that no one has ever really, all the way, tried to execute before. yes. Why don't you think anyone has tried that? Like to the full extent of what you're talking about.
I think it's time in its product market fit. You can have the greatest idea, but released the wrong time and IT won't work. But i'm sure there's been plenty of attempt to a pluto before pluto's time, but it's it's all about coming at the right time when different parts the market are are kind of right for disruption.
And in my view, that there is no Better time to discuss category when that hits that commodity state, when there's very little brand loyalty to purchasing A T V, when a consumer works in a costco, uh, and there's eight fifty five inch tps in front of them, they're all good. They're all the same specks and they look at once. And so and that's what they buy and and that's when something really has an opportunity to be disrupt there, right? I think that timing is there.
I think broadband connections are are now obviously at a Normal state. I think IT took time for that to happen. And I think because we live in this kind of court cutting, you know, a different APP ecosystem fragmented world with a bunch in of for device is popping up.
It's becoming very difficult from a consumer perspective to know what to get to know what to, you know to what to submit to. Where's my favorite show here? Should I get this, a system, or that a system? I need to speaker, I need this.
I need that. IT needs something to go to at all together. They know the day, as I said IT earlier, the TV is has the perfect open europe because IT is the biggest screen in the home is what keeps the family together.
Of course, we've got our iphones and there are more than capable of of doing what our TV do, but it's it's a single use experience with one consumer. No one's gather and around around their iphone, right? So think that TV is more than capable doing that.
And if you look at that telly, it's I was kind of make the ones to a car in a weird way because the top screen is kind of like your windshield, right? That your main focus, that's what that's what your content plays, that you your driving. But imagine a car without a dash watch.
Imagine you didn't have a phenomenal a radio. And now, like all the other things to kind of enhance your you're viewing experience, we have to accept that right now we live in a multi screen world, right? And if we are watching a foobar game or a movie, everyone around this is on their phones, right? That's a huge distraction.
And they're taking their phones out. They're looking at scores. Maybe they are betting on a game or whatever is right? Let let me see what actors and that movie. Let me check out your rock tomatoes reviews before you pick something. But imagine doing that right there on that single screen right in front of you, right? Your browsing netlik titles in the rocking tomato reviews just show up right there below you.
That's that's what a cars dash does, right as as you're driving and and that's why we believe this kind of dull screen approach solve so many problems, right? Because if you're a TV maker, you can't overlay someone else is content, right? And unless you maybe amazon, you've got the device and you've got the content, you have some opportunities to enhance IT and you could see a lot of what you're doing. I think that's fantastic, right? But if if you wanted stay neutral, right, you want to be able to do IT I across the board, you've got ta do IT on the device and you've got ta do IT on the device that let you do that nostitz whether you have that opportunity with the media companies.
You just named a lot of things that are very hard to execute, which I think is again, part of fight. This is very interesting, like just to pull IT one right, this question of there's a lot of stuff on a lot of different services. How do you find the stuff to watch like everyone has tried that, that's not like it's not like an unknown problem, right? And then netflix just has no interest in playing nicely.
And the metadata of all of IT is a mess. And so like that alone, you could have built a big company trying to solve and that you're just that's just like one small feature of this thing. I guess part of what I am trying to figure out is like especially as you start thinking about building, telling you like, okay, we're going to be a hardware company. We want to do a lot of stuff, a lot of its software, a lot of its harder where we want to do a lot of things like how do you fight out, sort of where to start, like what's you need a way in that is compelling, that is new and different and going to like get people interested in the TV that isn't just like whatever cheap and I can find find the best by how do you sort of pick those first couple of spots to try and dress? Yeah no.
it's a great question. And and look, and you were a hardware company. We don't Operate like a hardware company. We're very much running this like a software company right in an media company where hardware just is a box.
Obviously, you have to check because we you know that the product we're building, but we're very much treating and almost like a tesla where let's overloaded with extra hardware and sensors and computing power. And every two to four weeks, let's push updates to make this thing Better and Better and start unlocking kid abilities that go beyond beyond television, right at a core. When we're building this, I mean, first and foremost, you have to build a good product.
Luckily, in the TV world there, there is like four odms that make the majority of televisions like. So our screen is made by the second largest TV pen of manufacturer in the world. They make twenty percent of all the tvs right for all the major brands.
So you don't have to to read that the wheel right like that's that's got the position you're in when you're in a commodity business, right, is there are a lot of support layers to help you build a product that's very comparable in the market. That's why you see a lot of newcomers. Ce, like like the rocks of the world, for example, going into the TV space, right? I made obviously is chAllenges, but there are also a lot of way, a lot of things that have really been done.
You don't have to read that the way. If your job is just like make a television that will display things that look pretty good, that's not that hard anymore.
That's not. And but that was like from a product perspective, TV one to want is what we call an internally that was first important most I go let's this thing has gotten work like any other TV period, right? But then we started looking at what are the big problems that existed now? okay.
Well, first of all, tps are so thin now and because there's no margin and people want to make money from something else that they're selling you a sounds bar. Well, that's kind of like a study experience, like what I just bought A T V. Now you forced to me to buy a speaker like, let's include that right? Let's make that part of IT right. And the same thing with a camera, like once again, like once you try telly and you do a zoom call on a big screen where where people look life size, you do not want to do a video call on any other platform, it's completely game changing.
So that's kind of the way we looked at is let's look at things that people are doing on other devices that we can bring to this device from the central perspective, right, like video calling and gaming and and having great speakers and having an assistance, like there's no need for another device that plays your music or has an assistant where your TV literally should be doing this in twenty, twenty three. So that's kind of the way we approach IT. What are some kind of proven low hanging fruit that have been already validated from from other devices that people are spending money on that would vantage all into this?
All right, we ve got to take a quick break, and then we will be back with more from Ellie posing on the future ity.
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But right, we're back. Let's pick up where we left off talking about the job of the T. V.
I have to admit, i'm sort of taken by aliens vision for what A T. V could be. It's the biggest cream in your house. IT leaves front center in your home. IT feels like IT bought to be much more than a big blank black screen most of the time, right? But nobody he's ever really try to do IT the way he's describing.
And I don't think it's because nobody ever thought to try, which is why I think the way telly is planning to sell the T V is one of the most important things about IT. So I asked ellia, how early in the process did he decide that the T. V was going to be free for customers?
Oh, that from the geo, our intention was never to go out there and become yet another hardware company and sell A T, V right away with the ideas. okay. Can we do the same thing that we did? A pluto free.
Free is by far the best way to market any kind of products, right? And this was proven even here, like we have in our first week of launching and maybe had hundreds of thousands of people sign up, right? We had to sign up every second.
They share their data. They they understood that their data already being monotoned by the TV makers. But here, there's a real value exchange and they're sitting on our weight less away, waiting first, first to deliver A T, V.
And if you look at the kind of people that sign up and the kind of people that are signing up every day, they're actually over index on in the over index and education. They're sadly, they understand that this is a Better, smarter TV of the future. And the fact that it's free is not because it's a low income, low budget TV is.
So do you think you could have made the opposite case? Like if you could come out and said, we made this TV, it's Better in every way. It's more powerful IT fulfill this vision of what we think a TV can be.
And also, it's a thousand dollars. It's twice the Price of you like piece of crap, roku T V. But trust is worth IT. You don't think .
they would fall on our on our nose that would fail because once again, consumers are like there you walk into a store, you see what i'm saying, not what you buy is the driver's Price, right? There's a baseline of quality that you're for. And then the next factor of how you make a decision of of of purchasing a tvs Price.
So even the idea of making the TV fifty dollars more by adding a camera to, I don't think that would work. I think the majority of consumers are are kind of driven by what the norm is and what the standard is. I think the only way to introduce a disrupt of product into the market in a category word commoditized, there so many other players is to also disrupted Price plan OK.
yeah. So this is really is the same as pluto in that way. Read is two separate insights. This should be free, and this should be Better that just kind of crash into each other. So what do you make of the reaction? I I like when telly first came out, my reaction, and I think a lot of peoples was basically, this is one of three things.
This is either like a game, this is either a horrifying, disobeying surveilLance nights are that is just going to show me as twenty four hours a or this is the future of television, because this is essentially the present of television. And i'm just now getting IT for free. And I missing any, did I did I go through the full range of emotions? What what other ones were there?
No, that I think I think obviously when we are coming out with a free product that people automatically, I think this is too good to be true, right? Like what's the catch? What's out there? And I think they quickly realized that it's actually on the flip side that when you look at other makers, they're double dipping on on the revenue sume.
They're selling you a piece of hardware. They're monetizing with ads. They're selling your data, right? And that's the reaction we got from consumers like we've had a little to no hesitation people signing up, right? People understood that, that there is that value exchange that, that they are willing to share their data and um because they're getting a thousand dollar TV completely free, right? And they understood that this is a product that is far superior than anything else in the market.
So and and that it's proven not only in our sign up, right in our weight list, but it's also proven all the usage, right, like we're in public data right now where where thousands of thousands of homes and and this thing is working and people are using in every single day, right? Tvs are own for six to seven years and they're used for the primary TV in the home is used for many hours per day. And when you're a device in the biggest screen in your home and in the most important device, essentially in a home that's used for six, seven years, it's not just a TV, it's a platform, right?
And that's the way we're looking out in IT. We're building IT is let's shift the box on TV. Yes, you could do everything else or TV can, but then lets start innovating and pushing updates. And there's so much more we could have built from the gec o, but we don't want to overrun the consumer. Like all this thing can do this and and this and this like it's coming, right?
Like there's like you might come home one day and and you might see that hey, like you see a list of your of your friends that have tells online you might be able like, hey, David online, let's let's watch TV together. There's a game on right or let's let's say, hey, telling, take a photo of me and send to mom mom comes home, sees a photo over sun, right, and pins IT to the bottom screen and in a cute photo frame and that lives there, right? There are so many things that that we can do with this device, but because it's free, there's no buried or entry, right?
The idea of another TV maker coming out with with a TV and try to do something social is gonna fail because, you know, let's take your video, you want to build a social experience, you have to make sure everyone else has a visio TV. But then that's, you know, that's not gonna en. But if telly is completely free, the idea that everyone now starts having a telling you can actually connect them and create this network of fact is absolutely feasible. And you'll get that something that we're going to start rolling out more and more of .
in the next month OK. What do you say to the people who look at what you're offering, both in terms of like the ad supported stuff and the the camera and the data collection and see a total nightmare surveilLance health cape, are you interested in winning those people over? Like what do you how do you make that case?
I I look where privacy first company, where product first company, right? So even from our ad experience, it's not intrusive, not interrupting. You're not going to see a video done while you're watching T, V.
To be fair, that's what everybody says about ads. And most people are lying when .
they say that about ads, right? And the camera is closed by default. When you open up zoom, we literally pop put up a message on the screening.
Would you like to open up the camera to do zoom call? The second you closes, zoom call the camera clothes, right? This is not the business we're in, right?
When you're looking at once again, other TV makers, they're monetizing your data with very little to no permission, right? They're monitise ing in media for stress. We're just very upon to transparently about IT.
We let consumer know everything is fully up in nothing is hidden in long terms of service, right? You're there. We tell you, you're opting into this.
You're opting into that. This is how we use your data. This is how we advertise and the exchange we're giving your free TV and all these other guys aren't right. So and it's it's a conscious decision, and we're seeing very little to no push back from the consumer side of things, right?
If you even if you look at some of like like the interview we had and like a water street journal, for example, right, they did, I think the reporting was fantastic. They want to see interviews, some privacy expert, he said, yeah, they could be a concern about this. But then the consumers said, yeah, you know, I signed up because I know all these other guys that i'm paying A T.
V. For already do this and they do with without my permission. In this case, i'm getting a very clear value. So why not? right?
Yeah, I think that is a slightly nighest way of looking at the world. And also, I think absolutely true, right? And this is a thing we struggled a lot is like to some extent, it's really important to talk about privacy and how your data moves around the internet and what companies and platforms know about you and what they can do with that information, how matters.
And on the other hand, I think most people either don't care or think it's so far gone that is not useful to think about. Like, personally, I just I strugling with that all the time. It's like, how much does being a privacy there IT mean anything to anyone anymore? I genuinely don't know the answer.
And I think part of what you just said that I think is so interesting is like you're basically just saying the quiet part loud, right? You're think like, yes, we are going to make money off of the data that you give us when you use our product. So is everybody else. We're just going to be much louder about IT and that kind of a wild approach. But I I like I kind of respect IT, I have to say.
But I think transparency is key. I think when consumers get upset is when something happens that was opposed ted, right? And that's when you see a lot of the trouble in in any kind of IoT companies is when when people thought one thing, another thing happens, right? And and for us, once again, we let this from a privacy first perspective, right? If you go to focus groups, you're and if you're like a samsung, you want to focus gp.
So we put a camera in our TV, right? There's really such a bad reputation and there's like some negative connotation about the product that most people say. No, right? And that's what a lot of focus groups are wrong from that respect or right because they know actually position at the right way.
But if you understood the value ads that that gives you, that you could do video calls and fitness and gaming and all these other things that a Cameron locks. But you make people feel comfortable, right, because the shutter is closed and because you're very up fun about how you use the data, how you monitise. And it's a very different kind of experience in relationship that a company can help with that consumer. And that's that's how we're position. When is the other way .
that IT becomes a chAllenge? Yeah, no, I think that's so very fair. And I think there is in there somewhere though still A A bar. You have to hold on your own right.
Like I think the idea that everybody is going to like read the terms of service carefully and and fully understand and think about IT and agree to IT is it's just not true like nobody does that. So you can come in and say like we are much clear about IT the way that this works. And I think realistically, you're right that just by virtue of the fact that the TV is free, people are going to like inherently understand what the trade off is like.
That makes solo a sense to me. I am curious what you think sort of your own internal bar for like you say you you come from a privacy first perspective. Like what does that look like practically like on behalf of the users who still aren't paying enough attention to really know what's going on?
I mean, once again, I think transparency is key. I do think there are a lot of people that overlooked privacy, right? And as you said, they kind of just click I agree on every terms of service and and move forward that whether and maybe that's because they don't care, maybe or maybe it's because they already realized that has gone too far.
And everyone it's one of those things everyone already does and they are selling the data. So might just get A A some value change for I don't really know. You know like from my perspective, I know that there that are a lot of software that I use and a lot of hardware that I kind of opposites.
The the transparency around privacy, they're absolutely out there selling my data, right? But I also think there are a lot of laws and regulations in place um truth believe that make sure that if your data is sold, it's anonymized and those things are absolutely real like can anyone who violate those laws should not exist, right? So first of the most, you've gotta stay above every state and federal lot like that bars already there.
So even any time we have any kind of data, it's an honest, right? We're not attaching any personal vel level data to any act targeting data. And that's how you have to Operate a business like i've been in the art world on both the byline when I had an agency to to the cell side when I had pluto right now would telly.
That is extremely important. You have to protect people's data and you have to build environments that enable those levels of protection. Those actually already exist, right? Even if you're working with servers and services like gams s and they are built in to be able to have that level of data protection. So that's kind of my view. I think there there's a few people that are really vocal, if you will, on privacy and data.
But what are they are going to do like, like is there TV that you can go out there and purchase that doesn't show your data, doesn't deliver advertising? Like what are your options? Or do you just get, you know, no T V at all and you know run everything behind A V P N? Or I think you can complain all day, or you can realize that people need to run their businesses.
They need access to to data. And at the end of the day, advertisers want to target homes effectively. Like, so right for us, for example, we ask you at sign up, what car do you own? You know, are you in the market for a new car in the next six months? If you are, the advertiser wants to know that.
But Frankly, you want to know that as a consumer too, right? Because you want to start seeing relevant advertising for things that you have intend to buy, right? But if you block all your data, cover your dad, now you're seeing ads for you know stuff t that doesn't really important.
And that's I think that's where people started having a negative association advertising ing as when ads aren't relevant and IT feels like it's benefit enforcing one side and not the other side, we've got our whole business to make sure that, that benefit that goes two ways, right? That that you you're getting ads that are relevant. Advertisers are advertising to you because they know that you need this problem.
Okay, we get to take one more break, and then we will be back with more familiar posing on telly, pluto tvs and lots more.
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Download the gami APP for I O S and android today must be eighteen plus to use, right? We're back speaking about you know that the moment and the market conditions like we are in this moment where everybody is spending too much money on television and IT sucks up, right? And it's like I think we have hit that threshold in a really real way.
And I think you're timing is super interesting as a result because what you're doing is you're not just saying we're going to make one part of this cheaper for you. You're like let's just blow the whole thing up, top down and start over like it's gonna super interesting to see kind of how far that goods because I think like a va is having a moment right now, right, like pluto s groing very fast tub is growing very fast. We're in this place where people are looking for a way to make things like expensive, and they will happily watch some ads in order to do so.
I absolutely think you read about that. How far that goes, I think is really interesting. And I think that goes back to the question of the reaction to tell you and like how you think about the product itself because I think what a lot of people reacting to is the idea that the second screen is basically going to be an always on billboards showing me ads.
And from the way of describing the product, that doesn't sound like that the case. My initial impression certainly like it's just going to be A A, A scrolling sticker of ads as long as my TV is on. And that just sounds like a chrome user experience in a lot of ways is IT not that like how do how do you avoid being so bad at ads that people hate IT even though they like the train?
Yeah that's a great question. It's not that whatsoever, right? The majority of the screen is dedicated to widgets and content that actually is stand alone amazing and then enhances what you're viewing, right? So we've got like things like that time and whether in a new sticker and sports scores, right stocks, right, things that are very relevant and people are buying, you know, they have assistance now from google and amazon that have a lot of visual additives, not just not just your voice system with the speaker, but they actually showing a you a lot of useful information.
So that's built in and and that's like seventy five, eighty percent of the screen is dedicated to that, right? And then because we understand what you're watching on the main screen, we're able to automatically adjust those, which is based on what you're watching. So if you turn on a movie, we show you active information, right? We show you, you know, description the movie maybe some trivial, some funded ings to enhances the movie.
You're going to look at your phone anyway for that, right? And we're not saying, let's put that front center. The best way to look at is the bottom screen is almost like an ipad attached to the T, V.
Once again, you've got your family from this big device. Everyone's looking at their phones for different reasons. You're watching a sports game. You wanted know how the other teams are doing. Maybe, maybe your face is, maybe your fantasy team, you're going to look at the stats.
Why not put up front in center right? Maybe sports bedding, right? Why not of fanta drafting integration right there natively the ad is small part of of that of that screen, right? It's it's not there to distract you. It's there to obvious you support this kind exchange of being free and to connect with a consumer of very transparent way, but it's not the majority screen whatsoever.
In fact, once you use telling this, this is across the born, you can look at our data and look at any customer feedback is people love IT and very hard for them to go to back to a single stream screen. And i'll tell you, that is not a distraction. We haven't had a single consumer switch out of italian, go back to a device that doesn't have that bottom screen because they are not looking at a negative way.
interesting. okay. Have you tested to see like how many ads is too many ads? I think that would be a really interesting experiment to run.
Have you done that? Yeah still day. We're looking at every single day, right? And we have a rock star team like our head of product, satio, was they had a product that android TV for you for google.
He's running our product here. The same thing across the board, the ATS and everything else. We've got just the right team that has industry experiences and start up chops to make this work.
And you if you notice where we're a beta program, what TV company goes into a beta program, google launches gmail in data, whatever new product. That's the work that the software done in by bigger companies that's unheard of from a hard work perspective. And this is kind of going back to like my my roots, i've been a software guide my my entire life.
We're very much running this. Microsoft are company and we're very transparent. We've been in private beta where we tested this with close family and friends.
Just sure we've got like TV one to one of the court product done and stable and then we opened up to public data for people that we don't have a relationship with, but that to to go in this journey with us until kind of shaped the future of TV and make this product Better. And they're giving us feedback and they are sharing their data and they're telling us how to make this Better improvement. And it's working like the data is there.
People are using this every single day. In fact, even our original business model of how many hours per day people will use this, we were wrong by almost half, you know. So so it's it's working right? And people have multiple tvs in our house.
We want to make sure that this is the primary TV. And I get stuck in like a basement somewhere. One way to solve that is to make the right size right.
The average american family has a nine htv, so we made fifty five, right? So naturally, it's gna go in in the main room. But also people could just show them in a guest room or server hospital. Not right. And the data shows best on best on how often are watching yeah .
what happens if they do? I mean, I think part of what's been interesting about tel is trying to figure out how to make sure people use the products in a way that works without being scary. And you have some scary sounding rules about like, you know what you can I can do to the TV without violating the terms of service.
Like what baLance if you found that we are, like we need you to use your TV in a certain way for this business to make sense for us. But we also wanted to feel like a thing that you own that isn't just like a box that we've put into your house that we can take back at any time. You know, I mean.
yeah yeah, I think that's a great question too. I we want to have a positive, transparent relationship with our consumers. We don't want consumers that from us, right? We don't want consumers that tell us they are going to do one thing and then do another thing because that's we're trying to be successful as a company. And if you have a bunch of fragile consumers that take advantage of you, it's not going to be good for business, right?
So so for us, we put policies in place and to be able to have that opportunity to, in case someone is fragile, us to be able to take the device back and saying, like, look, you're covering up the botot screen or you're not using this, the main room, right? But first of the most want to to build the right experience. You can even cover up the bott screen, right? All of your settings, your volume controls, your HDMI switching, everything happens on the bottom, right?
So we actually cleaned up the top to make IT to easier to watch in the bottom of that's where your control series for your whole device. And Frankly, you don't want to covered up because that's where you're playing your music. That's where you're doing your zoom calls, right? That's where you're indoor bullet peers.
That's where you're getting like news and what is. So first of promotional, build a good product that people don't wanted fraud, right? I think that's a prerequisite.
If we built a product that is there just for our stake from a business prospect that's there to monetizing make ads s and we don't and that bottom screen doesn't actually provide any actually valuable in in story, then of course, people are naturally going to say, okay, i'm just going to get this someone to tell them them to do that when to do something else because I just want to three, fifty five htv. But then we failed for a product perspective, right? And and that's first.
And for most, what what our approaches is, let's build a kilo tron ic that people who actually want to keep us their main TV because it's Better, right? And if that's where you're playing your music and that's where you're doing your zoom calls and everything else, why would you put that in a guest bedroom? Then your primary TV in your living room is now not as powerful, right? And I think that's the way to IT.
And of course, we put things in place to give us the ability to, you know, take the TV back and things like that for people that thought IT. But we're not seeing that. We're seeing everyone who's that in the right way.
at least so far. Yeah, I mean, it's i'm not surprising in a beta test, right, like give a self electing group of people who are likely is IT. But I guess the the sort of extreme example would be like the idea that I could go on vacation for two months and come home in my T. V. Has been reported .
what would happen. We never that we would never do. And we don't have policies in place to that's just not realistic. What SOHO.
So all the software you mentioned, all the software are thinking about building. You mentioned you are doing integration. What's your sense over time of how much of this you're gna try and build verses like opening a platform like this is the telly APP store gonna be a thing like you want to build this giant corpus of stuff onto a big screen rate yeah. What's your sense of how much that you need to do yourself?
A great question. So initially we're doing at ourselves. We are built on on android, right, which which gives us huge advantage in a big existing ecosystem, right.
And similar to amazon fire TV, which is built on on the android as well, right? He gives you an advantage because you can you can use existing apps like we when we put spotify into into telly, there was pretty much no work, right? Because spot ff already had to enjoy TV apps, so we just ported IT over, right? And those things give you an advantage as a start up, but also in potentially the future, allow us to open up the apple store and create experiences that go beyond streaming.
And and I think that's the key phrase here, is beyond streaming, right? And if we do open up, an upstart will still be on an approval basis, of course, that we bring anything in as we don't want yet again, another kind of congested environment where there's like hundreds of apps and only five of them are good. But more importantly, we want people to build for telling things that they ouldn't Normally build for another TV maker because it's impossible to get that from the other TV maker because maybe they don't have a microphone, they don't have a camera, they don't have a second screen, they don't have great speakers, they don't have this computing power, right?
Our remote, you, it's, it's got a microphones, got some sensors, and that are also enable things in the future. Imagine this thing becoming a Carrier oke machine in a couple months where, you know, words appear on the top songs in the bottom, you pick up your mote. This has a mike right? Or a gaming pad or whatever IT is right.
So so initially, we're going to kind of create these examples of different use cases that show how we can go beyond a Normal television of what you're used to for last twenty, thirty years. And then eventually, we'd love to open IT up to those that want to build for. But once again, to go, we don't want just another fast service to appear on this thing, right? There's there's plenty of those. We we really wanted take this thing and to become the main device in a home just like your your iphone or your android poems is, is the main device at your home.
What kind of appetite do you think there is in in the world for folks who want to build that kind of stuff? I just think like if he feels like every three years apple tells the story about the apple TV being like an amazing game council and IT just isn't true. Like people don't play games on their apple TV.
That's just like not a thing, but apple desperately wants people to. And there's also, I think, like you talk about with the smart v platforms, you've one in this race to the bottom where all the apps are bad. Everybody has just given up on doing interesting stuff because it's pure commodity and its sucks and nobody cares anymore. Can you get to the point where your big enough and cool enough that exciting enough that you think you can like win back some of these people who have been burned by building TV stuff before?
I think you'll be surprised we're ready seeing IT, right, not just from individual like kind of developers, but major, major companies who have already built platforms for TV right, or second screen experiences for TV that are so behind what we're doing and and blown away by our two screen forever factor that even though we're not yet at millions of homes wanted build for us right now, right?
Whether that you know sports spending, which who has a natural environment or you know there, there are a number of startups that you may have seen that are trying to enable shopping on, like you're watching your favorite show on buy that that switcher right, like the famous you know friend switcher gm ever so but know they've built second screen experiences. But they're struggling because getting a consumer to take out their phone or their tablet walger watching T V is a huge hurdle, right? But they want to build for our our bottom screen experience because it's right, their fun in center.
It's almost like a those sec screen experiences on the main screen. And even knowing kind of our stage and where we are, they're very interested in a lot and are already building for us. So you'll start seeing a lot of these partnerships that I can't yet speak to will be front center and the developer feedback is there without us. Even so visiting IT.
I would think that building a future proof T V is really important and also really chAllenging. Like I have this rocco T V behind me that I sort to god, get slower every day because the apps update, new things come in and the processor just can't hang. Like you were saying, six or seven years, people are going to keep these.
These are not devices. You upgrade frequently. People I think we would like to keep more than even longer. Is IT as hard as I would think to build something like what telly wants to be? Six or seven years from now is so indicia and so big that like you to have to build a TV that works now and can get all the way there. I just think from a hardware perspective, that seems like be hard to do.
Yeah, I think I think that's a great question. When your TV maker and you're optimizing for the tiny margin that you make on hardware, you're not buying the best and fastest processor we are.
You're right. The worst one you can find.
right? So so because of that, you kind of have this natural absolution. If you were were like I mentioned, ly even building pluto for the most modern T V now is not it's a pluto is very heavy APP.
It's not it's not easy. And if you're building in up for rock, they're running like almost like a like a digital bill board script to be able to develop for its very chAllenging for us. We're treating this like a computer, the power inside of the device and the sensors that we've put in.
Some of them are utilized right to its full effect now because we wanted enable that, that future realization in the future. And we even added a bunch of expansion imports on the device. So let's say later, we want to add like a temperature sensor for whatever reason, like let's say you want this thing to no but temperatures in your home and then be a thermal making people making IT up.
We've put expansion reports on there so that you can expand the TV in other means. But we're very much treating like a tesla right where i'm on like third tesler. Even in the beginning, a lot of the autopilot hardware wasn't really enabled.
And and then how like delighted rv as tesla customers where we get in the car, we turned IT on and we see like, hey, we updated your car and here's all the news stuff c can do like that's awesome, right? And that's the way we're treating our software updates. And its not about fixing bugs and issues, it's about making the thing Better and Better and Better. And the only way to do that is if you're overload your device with extra computing power processors, memory storage connectivity and then you allowed to expand into additional centers beyond potentially what you loaded in, in because you can get everything right out to get co. So where we believe we ve built a very much of future proof device, we don't want to get get you into a new TV in two, three years like the other makers do.
And I think that's the other big differences is if you look at the makeup of like the engineering team at any other TV company, the majority that are supporting old models of tvs and building new models of tvs, right? Because tvs, like there are so many models of every other team, miracle we've got one, right? So we put this out and the whole thing is focus on making this one Better. And I think when you have that and when you're concentrating your team on improving the product rather than supporting legacy or building the next, you come out with a product that the other day that far superior and continues to grow as as people and and consumers above .
IT would also be terrible business for you, right? If you had to ship me a new free T V. Every two years, just to keep telling.
yes, it's not the way to do IT.
If this works, like if this hits, this really takes off, this becomes you become like a real huge player in the TV business. Do you think others will start to follow, like play this sort of same games? Are giving people substantially cheaper or even free to use and exchange for some of the other stuff like you think others can come after you that way .
potentially potential. You know you never know how the markets can change. We've got a lot of no patterns that we filed on, on what we've done and and we're also set up and away where we can enable these partner with us to be, you know, successful.
So we're happy to work with others. Actually been in communication with some as well on these kind of things. So I think it's quite possible, I think, for A A very well known TV maker to go out there and all of a sudden cut their Prices to zero.
But then canvas ze, their core business would be probably jedge from mental to their stocks. No, not good for their business. But you know you who knows? I think a lot of people are waiting and seeing what what happens to us um which I V C also gives us a big advantage, right? Startups move quickly.
That's the one advantage that that we have over every big company. We don't deal the buoy racy in the politics where where a small, nimble team and speeds are only advantage. It's not it's not our pocket books, right? We're not going to outspend.
A big company, but we're going to outspeed and we're going to out performing, and that's exactly we're doing. And by the time know the others realized that hate this is working and this something we need to do will be years ahead like pluto, right, where we're still by pluto, s by far. And the leading company in the space we had to had start, we maintain that head start with just great execution.
very enough. I can talk you about this forever. I find this totally fast, but actually let you go.
I know capture a long time. Thank you for in this. This was incredibly fun.
appreciated. Thanks so much.
right? That's IT for the verge cast today. Thank you so much to earlier for being on the show.
And thank you as always, full listening. Like I said, we have three more episodes to come in this series. We're going to be looking at connectivity from all different angles.
It's going to be really fun. This show is produced by Andrew marino and lame James. The verge cast is a verge production in part of the box media podcast network will be back with episodes on wednesday and friday.
They're still tons of news to cover this week. And a bunch of gadgets we haven't gotten to talk back again will be back next monday. With the next episode in our connectivity series, we'll see them rock and roll.
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