Are you watching your TV – or is your TV watching you?

Net Results: There’s a reason why modern, feature-packed smart TVs are so cheap

There’s a reason why those big, feature-packed televisions are so affordable, even the cutting-edge new ones shown off this month at the annual Las Vegas mega-electronics show CES.

I know what you are thinking: it’s some TV variation on Moore’s Law. The chips and electronics inside the big-screened behemoths keep growing more powerful as the costs of components drop. As with computers, so with TVs.

But that’s not it. The real reason is that the TVs can access your data – your screen time, what you watch, what you subscribe to and, in some cases, what you say.

Because, in yet another example of the invisible creep of corporate surveillance – so subtle that you were probably not aware it was happening – your TV now monetises you. And your data is so valuable to TV manufacturers that it is the predominant influence on the cost of your television.


The chief technology officer of major TV maker Vizio discussed this new paradigm in a Verge podcast from CES. Podcast host Nilay Patel notes that "companies like Vizio would have to charge higher prices for hardware if they didn't run content, advertising and data businesses". Oh.

You can turn off this data business surveillance "feature" on your Vizio TV, notes Baxter, and Patel says "Baxter told me that he thinks Vizio is the industry leader in disclosing what tracking is happening and letting users opt in or out during set-up."

But this is only because the company was forced to do so last year as part of a $2.2 million settlement with the US Federal Trade Commission, after Vizio was accused of "monitoring what customers are viewing on 11 million smart televisions", according to the Courthouse News Service.

“Per the terms of the order filed this morning with a federal judge in New Jersey, Vizio must delete data collected before March 1st, 2016. Going forward, the Irvine, California, company must prominently disclose and obtain affirmative express consent from customers whose data it plans to collect and share.”

Listening in

Lest you think the company, or all the others that also collect such data (Samsung has been collecting voice commands and even ambient conversation for several years, might suffer if you decide to turn off such data gathering, Baxter makes clear that the company makes so much money off monetising your data that only some people have to leave it on for Vizio to do just fine. So the TVs sell at around the cost of production.

“The greater strategy is I really don’t need to make money off of the TV. I need to cover my cost. And then I need to make money off those TVs,” Baxter said. He notes that when hardware capabilities allow it, the company issues system upgrades that enable older TVs – the ones that didn’t data-gather originally – to gather data.

Opting out of the surveillance is generally not a realistic option

All of this might come as a surprise to the consumer and TV purchaser. But this is just one tiny data surveillance corner of an already well-established and fast-growing market of formerly unconnected analogue devices that now quietly, and generally without our awareness, suck up data for what author and Harvard Business School emerita professor Shoshona Zuboff calls "surveillance revenues".

Take the Roomba robotic vacuum. You know the one – social media is filled with videos of lethargic cats gliding around on them.

You probably don't know that the devices also gather a precise map of your home as they roam about, one that company chief executive Colin Angle said might be sold on to companies such as Google, Amazon and Apple in future, though he rowed back on the statement later.

Spying Alexa

In fact, as with apps, pretty much the whole world of “smart” devices is structured on the surveillance revenue business model. Smart wearables, smart home devices, smart TVs, smart cars – anything with a chip and internet connectivity is logging you.

And that’s why all those voice-activated “home assistants”, such as Amazon’s Alexa and Google’s Home, are relatively cheap, given their functionality. Buyers dazzled at being able to ask Alexa for the weather, forget these connected devices not only take in extraordinary amounts of highly personal daily data about your home and personal activities, but also have microphones.

And opting out of the surveillance is generally not a realistic option. Significant functionality is linked to the data gathering.

Increasingly, hardware companies are taking a page out of the Facebook playbook. As Facebook's top executives, Mark Zuckerberg and Sheryl Sandberg, warned last year, you will lose services and may have to (gasp) pay for Facebook if you don't accept Facebook's surveillance of you. Likewise, devices lose the functionality they were purchased for if consumers don't let them surveil.

Because consumers cannot feasibly opt out (you cannot disconnect your car, for example) and confusing user agreements make it difficult to know what is actually being surveilled, this expanding “smart” market is a hugely problematic area. Legislation, and regulation, are urgently needed.