Telly on verge of exiting the pilot stage

Telly, a company that's leaning on consumer data and advertising dollars to support its free TV distribution model, is getting ready for its close-up.

"We're about the exit our pilot stage," Dallas Lawrence, Telly's chief strategy officer, said Tuesday at the Stream TV Show in Denver.

He didn't reveal a launch date. Telly began to ship units last July. Lawrence said Telly televisions are in "thousands" of homes at the moment across 48 states and more than 160 designated market areas.

"The response has been overwhelming," Lawrence said. "We'll be scaling fast. Nothing scales faster than free."

Telly's plan is to distribute its dual-screen TVs for free.

The Telly main screen, a 55-inch 4K/HDR television, is paired with a lower banner-style screen that delivers targeted and advanced forms of advertising, including ways to buy products with the click of a remote, and houses a "premium" sound bar. Telly is limiting distribution to one device per household, with the expectation that the Telly will serve as the household's primary television.

As the Telly is paid for by advertising, the catch for consumers is they must create a profile based on 126 data points, including user birthdates (recipients must be 18 years or older), gender, ethnic group, what apps they use, what programming genres they like and what types of sports they like to watch. Registrants are also asked for their favorite news outlets, if they have pets at home, household income and preferred airlines.

That data is used to deliver targeted ads to the Telly. TV viewers "don't hate ads; they hate irrelevant ads," Lawrence contends.

Telly's lower screen – a device that the company calls the "Smart Screen" – also provides news headlines, sports scores and stock information, and serves as a voice-enabled assistant. The combo device also supports a range of native apps including video calling, "mood lighting" and a library of video games. Telly, which contains a camera, has built-in Zoom, which can be used for a "watch party" feature among Telly users. Telly will also support a fitness app with motion-tracking and is developing a karaoke feature.

Telly is using its bottom screen to support multiple types of advertising, including digital coupons, shoppable ads and "tune-in" ads that can take a viewer to a TV show or movie that's being promoted. Telly also uses something it calls "synchronized takeover" – for example, if a national car ad is detected on the main screen, a companion ad will be activated in the lower right corner of the bottom screen. It will be possible, Lawrence said, for the viewer to schedule a test drive via the ad.

"We're way beyond the 30-second ad," Lawrence said. "We are in the golden age of TV advertising with the data but also the creative assets we're able to unlock." 

Users can opt out of Telly's use of data, but will be required to return the device.

He said the return rate on Telly devices is "very small," noting that only three have been sent back that he's aware of. He said those units were returned for the same reason – that the pre-cut space in the living room for a television would not accommodate Telly's dual-screen set-up.

Though Telly is being distributed for free, users must still validate their identity with a credit card. However, the credit card tied to an account will be able to be used to make purchases via Telly (using a PIN code) sometime down the line.  

Steering clear of the smart TV OS wars

Notably, the Telly does not come equipped with its own streaming operating system. Instead, each Telly ships with an Android TV-powered streaming dongle that can be plugged into one of the TV's three HDMI ports. Users can also pair the Telly with any other type of streaming media player or set-top box.

"We made a decision not to get into the streaming OS wars," Lawrence said. However, the apps supported by the Android TV dongle, such as Netflix, appear on the bottom tray of the television. "From a user experience, it feels like they're native on the TV," he added.

The value of the Telly is in the neighborhood of $1,000. In a quick check online, a 55-inch TV from Roku is on sale for about $299.99 at Best Buy. A 55-inch set from Hisense with Android TV and Google TV support fetches $279.99. Meijer is selling a 55-inch Xumo-powered TV from Element for $259.99.

Telly founder and CEO Ilya Pozin is also a co-founder of Pluto TV, the free, ad-supported streaming service that was sold to Viacom (now part of Paramount Global) in 2019 for $340 million.

Early reviews vary  

Early reviews of Telly have been a mixed bag.

A ZDNet reviewer noted that the ads "weren't nearly as intrusive as I thought they would be, and the audio and video quality were excellent." Telly's integrated Zoom feature "wasn't amazing," but was "absolutely fine for that purpose."

"Telly, for all its grand marketing, didn't revolutionize my TV-watching habits," noted another reviewer in The San Francisco Standard.

Streaming media expert and analyst Dan Rayburn recently referenced a less-than-stellar review on LinkedIn that was posted to a message board. That user, he pointed out, had some issues with the Telly's inconsistent ambient lighting, trouble turning the unit on, "terrible" sound and poor technical support.