Why Are Smart TVs So Cheap? Because Some Of Their Makers Are Selling Your Data

Written by Ann Brown

You might want to think twice before you run out and buy that cheap smart TV.

Sometimes a bargain is too good to be true. Think about it: you can find a 65-inch 4K smart TV with HDR capability for less than $500. What’s the catch?

Listen to GHOGH with Jamarlin Martin | Episode 40: Jade Martin & Victoria Jordan Jamarlin talks to Jade Martin and Victoria Jordan, branded entertainment producers for Urban One (NASDAQ: UONEK). They discuss their work for Toyota, P&G and Coke, and the cultural impact of reality TV on Black America.

Smart TVs cost so little these days because manufacturers are making money elsewhere — by collecting and selling your data. Most owners don’t know what they sign up for and agree to when they turn on their smart TV. Companies like TCL and Vizio specialize in low-cost, high-tech smart TVs. They can offer such low-priced smart TVs because they make money selling data.

“The vast majority of televisions available today are ‘smart’ TVs, with internet connections, advertising placement, and streaming services built in,” Business Insider reported.

Photo by Jens Kreuter on Unsplash

Not all, but some smart TV manufacturers are selling your data to third parties. This can include information on the shows you watch, the ads you view, and even your general location.

In essence, your TV is watching you back.

The New York Times took a close look at the rise of services that track viewers’ watching habits—in particular at a company called Samba TV, which has claimed to gather second-by-second information on what people are watching from software it installed on some 13.5 million smart TVs in the US, Technology Review reported.

Manufacturers aren’t hiding the fact that they sell your data. In a recent interview on The Verge’s podcast with Vizio’s chief technology officer, Bill Baxter, explained how the process works.

“This is a cutthroat industry,” Baxter said. “It’s a 6-percent-margin industry. The greater strategy is I really don’t need to make money off of the TV. I need to cover my cost.”

He added:  “It’s not just about data collection. It’s about post-purchase monetization of the TV.”

But if you have a smart TV you can stop the collection of your data in most cases.

“On TCL’s Roku TVs, users can opt out of the full scope of ad tracking. How much you’re able to block yourself from data tracking varies by TV manufacturer,” Business Insider reported.

“You sell some movies, you sell some TV shows, you sell some ads, you know,” Baxter said. “It’s not really that different than the Verge website.”

According to Baxter, if the manufacturers didn’t make money elsewhere, they would have to charge consumers more. Without that revenue stream, Baxter said, consumers would be paying more up front. “We’d collect a little bit more margin at retail to offset it,” he said.

But there has been some backlash for this practice.

“Last year, the Federal Trade Commission fined Vizio for $2.2 million over a similar issue. But that was because Vizio sold the data it collected to third parties without users’ consent. Samba walks a fine line—it pays TV manufacturers like Sony and Philips to carry its software, but the data isn’t sold. Instead, Samba uses the information to sell targeted ads,” Technology Review reported.