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‘Post-Purchase Monetization’ — Why Smart TVs Are Cheaper Than Dumb TVs

Nilay Patel interviewed Vizio CTO Bill Baxter at CES:

Patel: I guess I have a philosophical question. You guys are committed to low price points and you often beat the industry at those price points. Can you hit those price points without the additional data collection that TV does if you don’t have an ad business or a data business on top of the TV?

Baxter: So that’s a great question. Actually, we should have a beer and have a long, long chat about that.

So look, it’s not just about data collection. It’s about post-purchase monetization of the TV.

This is a cutthroat industry. It’s a 6-percent margin industry, right? I mean, you know it’s pretty ruthless. You could say it’s self-inflicted, or you could say there’s a greater strategy going on here, and there is. The greater strategy is I really don’t need to make money off of the TV. I need to cover my cost.

I know a certain company that is really good at succeeding in “cutthroat” low-margin industries by making superior products that can sell for higher margins. And their products tend not to do creepy stuff like this.

Let’s be clear what this is: the TV makers have software that watches what you watch and keeps track of it to show you targeted ads.

Tuesday, 8 January 2019