Smart TV Makers Will Soon Make More Money Off Your Viewing Habits Than The TV Itself

from the what-could-possibly-go-wrong dept

“Smart” televisions have long been the poster child for the abysmal privacy and security standards inherent in the “internet of things” space. Such televisions have been routinely found to have the security and privacy standards of damp cardboard, making the data they collect delicious targets for hackers and intelligence agencies alike.

At the same time these companies have failed repeatedly to secure (or sometimes even encrypt) consumer data, their data collection revenue is positively exploding. Vizio, for example, recently noted that it made $38.4 million in one quarter just from tracking and monetizing consumer viewing and usage data. It made $48.2 million on hardware (both TVs, soundbars, and other products) in that same period, and that gap (if not already closed) is quickly closing:

“Its device business (the part that sells TVs, sound bars and the like) had a gross profit of $48.2 million in the same period, up from $32.5 million last year. While the hardware business has significantly more revenue, profits from data and advertising spiked 152 percent from last year, and are quickly catching up.”

The problem researchers keep pointing out is not enough of that revenue is being put back into device security research and privacy standards, which is why Vizio, like most “smart” TV manufacturers, has been repeatedly caught in privacy scandals. Like that time it had to shell out $2.2 million to the FTC and NJ AG for failing to inform consumers this data was even being collected. By the time consumers got their share of that settlement, it wound up being about $20 per person. And it’s not really clear anything would have happened at all if not for a 2015 ProPublica investigation into Vizio’s lack of transparency.

The problem of course is that regulators, when they do bother to act, act half a decade after the fact, and only if a journalist exposes the problem first. Consumers then get a tiny pittance. And it shouldn’t be too hard to understand how a $2.2 million fine — for a company pulling down $38.4 million every three months off of consumer data alone — probably isn’t going to be an effective deterrent against future privacy abuses. It’s viewed as just a light gnat on the nose and the cost of doing business.

Consumers do have a bit of control. They can disable a set’s WiFi features entirely, even though in many instances doing so can disable core set functionality in obnoxious and unforeseen ways. Ideally I’d love to be able to buy a “dumb” TV that’s just a great display with HDMI ports and no “smart” internals, but because consumer data is now so profitable, most TV vendors no longer even sell such an option.

It’s also worth remembering that your smart TV is just one in a long line of systems collecting and monetizing your data, including the streaming hardware you’re using (Roku, etc.), your ISP, any additional internet of things devices you’ve connected to your network, and even your energy company. While folks intent on downplaying modern privacy abuses often like to pretend this is the age of consumer empowerment, it’s not really possible for consumers to “opt out” of data collection and monetization at the scale it’s now occurring. Even with a lot of elbow grease, technical innovation, and external help.

Organizations like Consumer Reports have been pushing hard for improved efforts to warn consumers about potential privacy abuses at the point of sale, including them in product reviews and even on product packaging. And while their “open source” efforts on this front are really interesting, we’re a long way away from this kind of transparency being the norm.

Filed Under: , ,
Companies: vizio

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Smart TV Makers Will Soon Make More Money Off Your Viewing Habits Than The TV Itself”

Subscribe: RSS Leave a comment
38 Comments
Anonymous Coward says:

Re: Re: Internet required

It’s only a matter of time before the first internet required TV comes out.

You’ve gotta update the software, right? Otherwise, someone could drive by your house and broadcast a signal to exploit some RF decoder bug (the TV’s probably scanning to update its channel map even if you don’t watch broadcast signals), and collect all your data anyway.

Anon says:

Re: Re: Internet required

My cable provider knows what I watch, and has provided me with a box that records shows, and also allows Netflix, Prime, and assorted other services. I see no need to let my TV track this too. Plus, if I’m using my old PC hooked up to the TV, then only my VLC player knows what I’m watching; and my Blu-ray doesn’t have internet access either, so it can’t tell on me when i watch one of my 600 DVDs. So I will allow the least number of trackers I can get away with.

I agree, there’s very little I watch. I see ads for shows all the time, and watch virtually nothing but news and sports in real time. Nothing much appeals to me – maybe I’m burning out, there’s only so many original plots in a flood of redundant shows. (My wife gets mad when I figure out maybe 1/3 the way into a show whodunnit or what the embarrassing outcome of a comedy setup is going to be) I can see the day coming when I can cut out cable completely and still have the same services.

This comment has been deemed insightful by the community.
PaulT (profile) says:

Re: Re: Internet required

" It’s been years since I’ve seen anything on TV worth my time to watch, so I don’t miss it."

Good for you. Always nice to know that someone will always react to an industry problem with "I don’t personally use that product". That’s always so helpful…

Meanwhile, you’d be even more protected if you didn’t use electricity, while the privacy issue concerned here (which expands way beyond broadcast TV) will still exist for anyone who has it.

Anonymous Coward says:

Re: Internet required

Low cost, low-bandwidth (ie, regular old 4g) wholesale mobile internet costs surprisingly little — a buck or two a month at a big enough scale. When it becomes profitable enough, your "smart" tv will come with its own mobile internet connection that will phone home the valuable stuff (to them) even if you don’t want to provide it your connection.

Nick-B says:

I would LOVE to have a TV that doesn’t take longer to turn on than my Windows computer. With the large number of streaming capable devices, why would anyone use built-in TV services when they can get a device capable of downloading and customizing the installed apps.

We have a decade-old TV that is nice (turns on slowly though), and has a built-in youtube app. It hasn’t worked for 8 of those years, because it can’t be updated and youtube swiftly updated their APIs to break the app. But there it sits on our menu, taunting us.

Oh, and don’t get me started on the cheap FireTV I bought, before discovering the reason it was cheap was because it slathers ads for amazon crap all over the home screen (that it launches into, rather than the HDMI input it was last left on).

This comment has been flagged by the community. Click here to show it.

This comment has been deemed insightful by the community.
Anonymous Coward says:

Dumb tv

I really want a television that is just a monitor: no "smarts", no tuner, no internet connection. Just a source select, volume, and picture adjustments. Everything else can come from an attached cable box, game system, Roku, etc.

Anonymous Coward says:

Re: Dumb tv

Karl asked for the same:

Ideally I’d love to be able to buy a "dumb" TV that’s just a great display with HDMI ports and no "smart" internals

These do exist: they’re called commercial signage displays. Made in large sizes by Samsung, LG, and others. They’ll likely have to be ordered, maybe online, but they’re not in any way rare. More expensive than TVs, of course, but not absurdly so.

One can also just use computer monitors. They’re easy enough to find up to 30-40 inch diagonal sizes. Not quite as big as TVs nowadays, though I remember the days when a 40-incher was a "big-screen" TV, owned mostly by rich "home theater" people.

This comment has been deemed insightful by the community.
united9198 (profile) says:

Tip Of The Iceberg

Most people get upset at the thought of a tracking device in their vaccine but give little or no thought to how much their smart tv or motor vehicle are tracking their every move. Cars might be the worst, but yet few people even know that they are providing tons of free data that the car companies are selling. You don’t need the internet to be tracked in your car.

Anonmylous says:

Modern problems require modern solutions

They can enjoy knowing my TV is plugged into a PC 24/7 I guess. Whether I use a browser to watch streaming, or watch my own library, all they’ll see is feed from a GPU. Yeah yeah, Google, YouTube, etc are watching, I know. But one less spy in my life is still one less spy.

Anonymous Coward says:

Re: Re: Modern problems require modern solutions

Who’s "they"? Streaming providers (including cable TV providers, unless you’re still analog) can certainly tell exactly who is watching what, when. More than that, they know whenever you pause, rewind, try and fail to skip ads, etc. At least, I’m not aware of any anonymous "streaming services", though youtube-dl can download public videos over Tor, from Youtube and some other sites.

For example, couldn’t the same technologies used to scan for copyright "infringement" in other contexts, could be incorporated to compile a record of what you’ve been watching?

If I’m understanding you correctly, that’s what youhavedownloaded.com was. There’s also the low-tech method of looking at dark houses/apartments at night, and watching the light bouncing off walls. It’s easily done "by hand" for live signals—flick through the channels until your own light pattern matches theirs—but I imagine a computer could compile a huge database of signatures to recognize streaming shows. Honestly, I’m surprised there hasn’t been a scandal in which some TV rating company was caught doing exactly that. (WTF does Neilsen do these days?)

This comment has been deemed insightful by the community.
That One Guy (profile) says:

'Yeah... we'll... get right on that... later...'

No worries, I’m sure the same politicians who are constantly ragging on social media companies over their privacy policies and collection/usage of user data will be all over this, I mean it’s not like they’re just dragging social media companies through the coals and just using user privacy as an excuse or anything…

Leave a Reply to BernardoVerda Cancel reply

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...