Television used to be about one simple thing: getting the best possible screen into your living room. But as the technology has evolved, so too has the business model behind it. Today, the TV in your home is less of a one-time purchase and more of a continuous revenue stream for its maker. Welcome to the age where the real money isn’t in selling TVs, but in selling you.
It wasn’t long ago that success in the TV industry was measured by the number of units sold. As smart TVs became the norm, however, and profit margins on hardware shrank, companies began searching for new ways to keep the revenue flowing. The answer? Turn TVs into platforms for advertising and data collection.
Brands like LG, Samsung, Roku, and Vizio have shifted their focus from simply moving units to generating recurring revenue through their TV operating systems. These systems now host a barrage of ads, from the moment you turn on the TV to every click of the remote, and even on screensavers. According to GroupM (thanks to Ars Technica), smart TV ad revenue grew 20% from 2023 to 2024 and is expected to grow another 20% to reach $46 billion next year.
How Do TVs Track Us?
Automatic Content Recognition (ACR), a technology that allows TVs to monitor what you watch and how you interact with your screen, is to thank (or curse) for this huge transformation. ACR can track your viewing habits in real time, providing TV makers with valuable data that can be sold to advertisers. This technology is often activated by default, and while users can opt out, doing so is rarely straightforward.
Vizio, for instance, has been caught using ACR without user consent, raising major privacy concerns. Companies like LG and Samsung have also increased their focus on data collection, making it clear that ACR is now a mainstay component of the smart TV ecosystem.
LG is pushing the boundaries of what’s possible with ACR, partnering with Nielsen to provide comprehensive streaming and linear TV data. This partnership makes LG a powerhouse in the TV data scene, with plans to have 300 million webOS TVs in homes by 2026. Samsung, not to be outdone, has updated its ACR tech to track ads viewed via streaming services, making its data even more valuable to advertisers.
Both companies are investing heavily in their TV operating systems. LG plans to pour around $737.7 million into its webOS business by 2028, while Samsung continues to enhance its ACR capabilities. The message for consumers here is that the future of TV isn’t just about what you watch, but how companies can monetize that viewing.
Budget TVs Will Cost You More Than You Think
If you’re shopping for a budget TV, you’re likely to encounter this business model in full force. Brands like Roku and Vizio offer affordable sets but offset their low prices with aggressive ad strategies. Roku, for example, has introduced home-screen video ads and has even tested mid-roll ads that play when you return to the home screen from a screensaver.
Amazon, too, is getting in on the action. The company has shifted from an Android fork to its own OS for Fire TVs, giving it more control over ad delivery. With full-screen video ads and the potential for even more intrusive formats, Amazon is set to make a massive payday from its TV OS.
TV ads are nothing new, but the integration of internet connectivity and advanced tracking has transformed TVs from billboards into storefronts. The rise of “shoppable ads,” which allow viewers to make purchases directly from their TVs, is a clear indication of where the industry is headed.
Companies like Amazon and Roku are leading the charge, with shoppable ads already appearing on screensavers. Samsung is also exploring new ad formats, while retailers like Walmart are eager to tap into the data these TVs collect. Walmart’s proposed acquisition of Vizio for $2.3 billion shows just how valuable TV data has become.
As TV ads have become more sophisticated, so too have the ways in which companies track your behavior. Emerging players like Displace are pushing the envelope with gesture-based shopping, where a simple hand raise can trigger a buying spree. Meanwhile, Telly is offering free TVs in exchange for comprehensive tracking, including how many people are within 25 feet of the screen. While these models are still niche, they represent a growing trend of turning TVs into e-commerce platforms.
Is There a Way Out?
For those uncomfortable with the idea of their TV watching them back, the options are limited. Non-smart TVs are becoming increasingly rare, and even opting out of tracking on a smart TV can be challenging (or downright impossible). Some users have resorted to hacks to disconnect their TVs from the internet or even build their own smart TVs. But only very few are really willing to DIY a TV.
Unfortunately, for most consumers, the adification of TV is something they’ll have to accept or pay a premium to avoid. The days of TV as a simple, ad-free experience are long gone. Ad revenue is king, and TV manufacturers are likely to continue pushing the boundaries of what’s possible. The number of TV operating systems is expected to grow, but whether this leads to better experiences for consumers remains to be seen. We wager that it won’t.
