After Vizio, is Telly next?

By Omri Argaman, CMO/CGO, Zoomd

With recent Walmart’s acquisition of Vizio, the industry’s proverbial guessing game of ‘Who’s next?’ began.

Though it’s a very different TV offering, I think Telly might be next.

For those who missed Telly’s PR onslaught last May, the company announced that it planned to ship 500,000 free TVs in 2023. The TVs, worth about $1000 according to the company, ship with a 55-inch 4K picture screen and a second, smaller display screen featuring customized apps and ads. Telly’s business model is focused on selling targeted ads as well as customer viewing habits and ad engagement data.

Telly didn’t ship 500,000 TVs in 2023. The company claimed it shipped ‘thousands of devices’, and CEO Ilya Poznin said that there are close to 400,000 people on the company’s weighting list.

Here’s why I’m bullish on Telly

With consumer tech products, seeing is believing. That’s why I was impressed by ZDNet’s review of Telly. Though most people outside of the advertising industry are less bullish about advertising and user data, the reviewer said that Telly was ‘far better than expected’. He felt that the ads weren’t nearly as intrusive as expected, that the audio and video quality were excellent, and that the built-in camera provided new and fun ways to interact.

The reviewer also said that Telly served relevant ads based on what he was watching and that ‘the rotating ad on the bottom screen fit nicely beside the rest of the information… information I started to find useful.’

Another data point that impressed me is that Telly said that among their thousands of users, usage is more than twice the national average of 3.5 hours for TVs.

The built-in camera is enabling Zoom calls today, and could easily support fitness classes or multi-player games in the future.

It’s the ads and data

The real opportunity for Telly is tied to ads and user data. Automaker Kia ran an ad campaign with a full takeover unit on Telly’s second screen which resulted in a 60% recall rate, 300% higher than competitive auto commercials in streaming and broadcast ad breaks.

Addressing the challenge of making a sale from most CTV or OTT commercials, Telly has installed an integrated browser that enables users to go online when they see an ad that interests them. Telly also facilitates T-commerce by letting users shop online, even from interactive ads, or order food while watching a game or other show on the TV.

The only thing holding back Telly’s ad opportunities is the lack of scale.

Analyzing ad and user data will enable Telly to provide granular data about TV user consumption and ad engagement. The company already has a data licensing partnership with Nielsen, but given the size and quality of Telly’s data, who needs Nielsen’s panels?

Who could buy Telly?

After Walmart’s acquired Vizio, many might consider Amazon as a company likely to purchase Telly, but given the growth of Amazon’s advertising and Prime businesses, coupled with the objection of the company’s attempt to purchase iRobot, I doubt Amazon would receive regulatory approval for purchasing Telly.

TV measurement companies including Nielsen, comScore, iSpot.tv, Samba TV, or VideoAmp would all be logical acquirers though other than Nielsen, I’m not sure any have the finances available to acquire Telly.

Though I could see the value of Telly to a major consumer goods marketer like The Coca Cola Company, Nike, Inc., Unilever N.V., Procter & Gamble, PepsiCo, or Nestlé SA, I’m convinced these companies would buy a technology company so far from their main business models.

The major streaming companies would find value in owning Telly, but I’m not sure anyone other than Netflix or Disney could acquire Telly, and I’m not sure either would pursue an acquisition like Telly today.

I think that Microsoft and Meta would be the most likely acquirers. For Meta, the acquisition would make sense if the company could find a way to integrate Telly TVs into their vision for the Metaverse. And for Microsoft, it’s an entrée into a new device beyond computers in the home. Of course, potential regulatory issues could impact both companies.

As I mentioned earlier, scale is an issue (for an acquisition). Telly has ‘thousands of devices’ in the market according to the company, and a weighting list of 400,000. By comparison, there were 17.5 million Vizio SmartCast smart TV active users in Q1 2023. That’s a big difference that will impact Telly’s valuation, coupled with the fact that the company doesn’t manufacture the TVs it sells.

Like everyone, the founders and owners of Telly have a price. Will the potential acquirer be willing to offer a price that everyone will accept?

Only time will tell.

GET IN TOUCH
Got a Question? We’ve Got Answers.