Post Purchase TV Monetization

Good article in Business Insider explaining some of the dynamics of the TV market. But on a larger scale, I think this is the direction a lot of consumer tech is going.

Ad-funded…or partially ad-funded.

This is basically TTD’s entire thesis. Digital ads and programmatic buying of advertising is the future.

Other companies that might benefit are Data Analytics companies (AYX, DATA) to help companies analyze opportunties/results. I’m sure there’s more too.

My question: at what point do consumers say enough? And get tired of the ads? I think we’re a long way from that. Something like 80% of Hulu’s customers choose the ad-subsidized model to save $4.00 a month. Same deal with Spotify.

Smart TVs can be sold at or near cost to consumers — which is great for consumers — because Vizio is able to monetize those TVs through data collection, advertising, and selling direct-to-consumer entertainment (movies, etc.) — which is less great for consumers.

In the BI article, there’s a link to a Podcast interview with a Visio exec talking about the strategy more in depth.

"Or, as Baxter put it: “It’s not just about data collection. It’s about post-purchase monetization of the TV.”

"Without that revenue stream, Baxter said, consumers would be paying more upfront cost. “We’d collect a little bit more margin at retail to offset it.”

https://www.businessinsider.com/smart-tv-data-collection-adv…

6 Likes

My question: at what point do consumers say enough? And get tired of the ads? I think we’re a long way from that.

Agreed. Otherwise Apple would be miles ahead with their email, messaging, etc. But who is leading? Amazon, Facebook, Google – people who show ads and sell your digital life in exchange for cheaper, or even free, products. People complain about ads, but they hate paying even more.