Dallas Lawrence, Chief Strategy Officer of Telly, joins Michael Beach to discuss an innovative new offering in the free, ad-supported TV (FAST) space and the optimal value exchange between media companies, device manufacturers, and consumers. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!
MB: Dallas, welcome to Screen Wars.
DL: It’s great to be here.
MB: I’m excited. Today, we’re talking about one of the most innovative companies in the convergent TV space. Could you give us some background on Telly?
DL: It’s been a really exciting journey since we took the company public eight weeks ago. To understand the origin of this company, you have to go back a decade. Our founder (Ilya Pozin) was looking out at the television landscape 10 years ago, and he saw this ecosystem where companies were charging consumers double. A consumer would sign up for cable and pay $100 a month and get ads delivered to them, or, in some cases, a consumer would subscribe to a streaming service and still see some ads. He saw a very interesting opportunity in this, and he thought, “There’s probably a model where the advertising model alone could pay for the content, and consumers wouldn’t have to be double-charged on.” In a time when everyone was thinking about subscription services, this was a groundbreaking thought process.
These companies weren’t thinking about ad supported streaming. So he created Pluto TV, the first really Free Ad-Supported TV ecosystem, what we now know as the acronym “FAST.” Back in the day, this kind of platform was a first for the marketplace, and it grew rapidly. 80 million people use Pluto TV today. It’s a billion-dollar business. And now you see every other streaming companies, from Disney to Netflix, racing into the ad supported ecosystem. That was the nexus, and that initial thought was, “Could the content be free?” Fast-forward a decade to 2021, and, as Ilya was looking at the ecosystem, he saw that double-charge happening again. Consumers would go into their favorite store, and buy a television from any one of the major manufacturers. And the second that consumer plugged the TV at home, that TV manufacturer tries to sell all their data, and sell ads to the customer. And they did not exchange any value with the consumer.
Again, he had the same idea as before, and was sure that there had to be a way to provide the TV for free as well, with an ad-support model. And thus came the birth of Telly, the first free ad supported television in the marketplace. Our distinctive feature is this dual screen technology, which comes with a beautiful 55-inch 4K HD television, and a stunning, integrated six speaker soundbar that will deliver an engaging sound experience like never before.
That second screen, below the main screen, is a tablet that becomes a home command center for all of your connected experiences. It comes preloaded with news, weather, and sports, but you also have the ability to have Zoom, and a built-in voice assistant that can interact with the rest of your household items. For example, you could say, “Hey, Telly, who’s at my front door?” And the Ring doorbell will pop up your camera. Telly is re-imagining that living room experience and putting everything in front of the consumer on that big screen on the wall.
MB: If I remember correctly, there is around $1000 worth of value in that TV. People sign up, and they get the TV, but what’s the trade-off of the consumer? What do they need to do?
DL: The first thing I want to mention is, don’t be fooled by the TV being free. What I mean is that free doesn’t mean cheap. This is the most powerful, most advanced television ever built. For the last 10 years, TVs have become a commodity, and it’s been a race to the bottom. The television unit itself has become a loss-leader, so the manufacturers cut every single possible thing they can out of it. The sound system is terrible. They want you to buy external components, etc. We went the exact opposite direction, and we said, “Let’s build the most advanced TV ever built.” We would think of it like a Tesla, where it launches with a lot of great features. Then, every month or so, we will deliver an OTA (Over-the-air) update to make the TV better, surprising and delighting consumers for the lifetime of the TV, which is about five to seven years.
We’re not focused on building the next model. We’re focused on making that TV on your wall better every single month that you have it. The value exchange we have with consumers is, we give them this great free TV, which is really free because it is supported by ads. And to make those ads really relevant to the customer, we have a questionnaire that they fill out. The consumer answers a series of questions in a six-minute survey, we ask about their likes, and questions like, “Do you watch sports? What do you like to do? Do you travel? What restaurants do you like to eat at?” So that we can build a relevant advertising experience for that consumer. For example, if you mention in the survey that you eat out at fast food restaurants more than the average person, you might get an ad on that bottom screen sponsored by Pizza Hut or McDonald’s.
That’s the type of ad experience that that household is going to want. They’re already going to go there, but now they’re being incentivized, and they got a TV for free out of it. And the most important thing that we start with is that privacy is the single most important thing for a company like us. This is the most transparent data relationship with the consumer in the marketplace today. We call it “zero party data” since you have to choose to share that data with us. If you decide to not share that data, no problem. We don’t have to have a relationship together.
That’s the exchange. The other thing that we’re also focused on currently is, how do we drive lifetime value to the consumer? So, next month we will launch a rewards program called Telly Rewards, where we will continue to deliver rewards to that consumer for the lifetime of their television. They may engage with an ad and get points that they can then use for a free Netflix subscription or to order a free pizza. That’s the goal here going forward.
MB: Is this more of a software play, or hardware play? How do you look at yourselves?
DL: That’s a great question. Telly is an amazing piece of hardware, but our goal is not to sell or give you a new every year or two. We want this to be the TV on your wall for the next five to seven years. We think of ourselves as a software and advertising company. That’s because we are focused on driving the best user experience possible for the consumer and also for the advertiser, who’s ultimately paying for that television and helping to drive a lifetime rewards for the consumer. We’ve gathered some of the best people in the entire industry here to build this experience. The operating system of both TVs is a proprietary operating system called Telly OS that allows us to drive an incredibly engaging two-screen experience for the consumer. It’s something that’s never been done before.
You have to face some unique challenges like the way sound works, how the speaker works, how do you use Zoom, among others. For example, people used to do watch parties at their house, where they would have their laptop in a corner and the TV on. But we’ve solved for that because this television integrates Zoom, and you can do a watch party. However, now you have to deal with things like, how do you tackle echo when you’re watching the TV on the screen, but you’re also on a video call with your family in the left corner. It’s been incredibly rewarding to watch the team tread an entirely new ground as they innovate this television.
MB: Is Telly OS still releasing with a Google dongle?
DL: That’s a great point. We decided not to get into the streaming wars because we don’t think consumers need another operating system for their streaming devices. They have selected that you’re either an Apple TV house, or a Roku house, or Chrome, or Amazon. We don’t want to make you make a choice. The TV comes with three HDMI ports in the back, and you are welcome to plug in any one of your favorite streaming operating systems, and the Telly system will run it seamlessly. It comes out of the box with a free $25 Google dongle, so if you don’t have a streaming operating system of choice already, we give you one. And since it is a system with Android as its base, the Telly remote will control that dongle. So you can have one seamless control for your whole experience.
MB: Interesting. So we’ve got the ads on the billboard, but is there going to be video advertising on the main screen as well?
DL: There are a couple different ad opportunities that we have. The first we have is the startup ad. As soon as you open the home screen, we have the opportunity to deliver an ad on the top screen. That will primarily be a tune-in ad. It’s an amazing platform for generating real-time awareness to the content experience. And since we have an integrated operating system, it can be a one-click tune in. You can have an ad for “watch this,” and we can deep link it right into launching the program. And then, you have that bottom screen. The tablet has all your widgets. If you’re a sports fan, soon you’ll be able to have your fantasy sports league and maybe your FanDuel betting apps. That way, you can see in real-time what you want to do and make real time betting decisions. And then, there’s one ad unit in the right-hand corner. That ad unit can be dynamic, expanding at some point if the advertiser wants to. What’s really exciting about that advertising unit is that we’re able to go beyond what is traditional. The television medium has always been an awareness driver, being top of the funnel advertising. And Telly unlocks its full funnel performance level advertising. For the first time, you’re able to have a direct performance relationship on the biggest screen in the house. You can have an ad unit in that bottom right-hand corner for Pizza Hut that says, “click here to order a pizza.” And you can launch the Pizza Hut to order and watch in real-time as the pizza comes to your house.
Or you can have a real-time tune-in advertisement to go deep into a piece of content. If you’re watching a show that has a branded partnership agreement with Toyota, you could click to test drive a Toyota. We also have the ability to mirror the two advertising experiences, since we have ACR technology to recognize what’s being watched on the top screen. For example, if you’re a national advertiser, like Ford, running an advertisement for the Superbowl, we could localize that ad in the bottom right-hand corner for Joe’s Ford dealership in your community to schedule a test drive. The advertising response to this has been overwhelming. They’re incredibly excited about what we’re unlocking in the living room for the first time.
MB: That’s amazing. How many people have signed up so far?
DL: We haven’t announced numbers past our first week because that greatly surpassed expectations. We had over 250,000 people sign up in the first week. It was about a signup a second as we launched this, and the signups have continued. It is very robust, and it has been all organic, with not a single dollar in advertising spent. Nothing beats the price point of free. And when you marry that with incredible quality, the response has been overwhelming. Our goal is to ship half a million this year. We will have no problem surpassing that demand expectation very soon. And we expect to do a couple million after that in 2024.
MB: Wow. When did TV start shipping?
DL: TVs will start shipping on the second week of July. We’ve been in private beta in several hundred homes for the last couple of months, and the response has been fantastic. People are watching the TV significantly. Even after turning their TV off, they keep their second screen on because they want the smart hub with the news, sports, weather, and more. That creates elongated opportunities for advertising engagement in the biggest screen in the house. It’s been a really exciting response.
MB: Shipping these TVs is big capital expenditure upfront. How are you funding this?
DL: We’ve had an overwhelming response from all quarters, including the investment sector. So, we’re oversubscribed on our seed round. We are well capitalized for what we’re delivering right now. We have some great investors who have really leaned in, including Rich Greenfield of LightShed Ventures, who co-led our last round. He is very bullish on how we’re disrupting the living room in a very positive way for advertisers and for the consumer.
When you think about how do the economics here work, you have to recognize that we’re not playing in the $70 billion US television advertising market. We’re playing really in the $300-400 billion US advertising market. And that’s thanks to that ability to tap into programmatic performance level ads that primarily have lived in search, social, and mobile. All of those dollars can play now on the biggest screen in the living room. I think we’re going to see a fairly robust payback cycle for the television.
MB: It’s interesting. How do details like deep linking, and the second screen come up? I know back to your time at Roku, there were thinking about shoppable ads and similar things. It seems like having total control on the entire hardware here, you could get much closer to making that a reality. Am I correct on that?
DL: 100%. We are having fascinating conversations with people about shoppable ads, and other unique things you can do. The television comes with a built-in camera that’s largely for Zoom, but other features could use it. For example, we have motion tracking fitness built in. This is like those $800 mirror systems that are actually just a screen on a camera, and we give that to you for free. If you think about motion tracking video games, we also give that to you for free.
But if you think about some of these shoppable ads, you could have the ability to try an outfit in a living room while AI technology lets you see it on yourself before you purchase. That is pretty cool, and we’re very excited about that.
And whenever people hear about cameras, they always ask about privacy, so I’ll bring this up. We always like to go back to our starting point: Privacy and consumer control is our number one priority. This is probably the only device in your household that has a camera that comes with a built-in physical shutter. And the TV keeps the shutter closed. The consumer has to take a physical action to actually tell the TV to open the shutter if they want to launch Zoom or an app that uses the camera feature. So they are still in total control of their experience.
MB: Is there anybody else out in the market doing this?
DL: No, that’s the exciting thing. Telly takes the vision that Ilya had going back a decade, when he recognized that the power of the ad supported ecosystem in the United States (in particular, and globally in some other markets) is so big. If it can pay for your content, it is very likely that it can pay for the hardware as well. Pull all that together as we’ve done has been really exciting to see.
MB: Excellent. This has been pretty amazing. Where do you see Telly in five years?
DL: The sky is the limit. We are seeing two fascinating things come together. One is that we’re seeing that consumers are overwhelmingly excited about a free television. This is not just certain subsets of the demographic population based on income or anything like that. We saw that the quarter million people that signed up in the first week over-indexed the national average on income. They over-indexed the national average on education, and two thirds of them were Gen-Z and millennials. These are generations that are naturally dual screeners. They sit in front of their TV with their phone or tablet in hand, doing multiple tasks at once. The ability to put those down, and have everything on that beautiful second screen sitting right there at your command is really appealing to them.
What goes right along with that is that that’s the exact same demographic that advertisers are having an incredibly hard time reaching today. Gen Z and millennials have cut the cord, they’re not watching ad supported content.
So we’re seeing the biggest advertisement agencies in the world lean in really heavily around this excitement.
And just as Ilya and the team at Pluto TV revolutionized streaming and introduced FAST, I think that in the not too distant future, you’re going to see Telly become the staple in the household. Where you have the Telly as your command center. It will be similar to the iPhone, that eliminated an entire class of devices we used to have in our homes. If you walked into a Best Buy, they used to have a whole aisle of digital cameras, and an aisle of GPS devices, and many other components. They were all wiped away, largely by the iPhone, that put all of those into one device.
We’re going to see the same thing happen with Telly. We’re going to see it eliminate entire classes of devices. You’re no longer going to need a speaker, or a voice assistant in your household anymore, because it includes “Hey, Telly” built-in. You’re not going to need that extra camera that you used to have for your Zoom. You’re not going to need your motion tracking fitness device. We really see this becoming a really profound utility in the household that gets better every month. And that also has that ongoing reward system built in. Again, the sky is the limit.
MB: Excellent. I’ll get you out of here on one more question. If you could wave a magic wand and change one thing about the TV video space today, what would it be and why?
DL: Having spent a great amount of time in the data space, the one thing I would change is that consumers should have more control over how their data is utilized, and companies should compensate them for it. Across every ecosystem today, companies take the consumers’ data, monetize it, package it, and resell it over and over again. And they’re receiving anything from that value exchange, except when it comes to Telly. And that should become the model. I hope that with Telly we change, not only the television model, but how we think about consumers data. Give them control.
The power of zero party data is that we don’t have to go scrape any third party data on our users, as everyone else does once they plug in a television. You’ve shared with us what you’re comfortable sharing, and that’s all we need to deliver a free television to your house and an incredible advertising experience. I hope folks will go to freetelly.com and sign up for their TV and check it out. But that’s what I hope changes if I had that magic wand.
MB: I agree with you. I know you and I are both believers in targeted advertising and the impact it has. However, you can’t do that if you’re violating the consumer’s privacy, or if they don’t feel comfortable with it, because they’re in control. So I couldn’t agree with you more.
DL: I agree 100%.
MB: Thanks, Dallas. I know our community is going to love this talk. You mentioned freetelly.com. Is there anywhere else we can find you?
DL: Right now, it’s freetelly.com. The Telly also makes a phenomenal bundle deal, so DirecTV has already launched a bundle agreement. You can go to DirecTV, and if you sign up for DirecTV Stream, they will put you to the front of the line for a Telly. We will have other bundling opportunities coming online. But right now, you can simply go to freetelly.com, sign up, get on the list, and we’ll hopefully get you one here in the next couple of months.
MB: Love it. Well, I’m grateful for your time.
DL: Thanks so much.
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Dallas Lawrence is a seasoned executive counselor with extensive experience supporting emerging tech and fast growth companies. His background in communication, crisis, public affairs, brand and digital media strategy has helped the highest profile organizations develop engaging programs that define, differentiate and disrupt market perceptions.
Today, Dallas serves as the Chief Strategy Officer and Head of Communications for Telly TV, the company revolutionizing the future of TV with the world’s first free dual screen television – the ultimate free television upgrade for the living room.
A veteran of the connected TV landscape, he was previously head of communications for the Roku platform business where he led communications for the Roku ad business, The Roku Channel, Roku Originals, Roku distribution and Roku’s public policy efforts. He previously served as SVP for TV measurement and data provider Samba TV and as the CCO and CMO for OpenX, the world’s largest independent advertising technology company. Previously, Dallas worked in the agency sector as the chief global digital strategist for WPPs largest PR agency counseling clients including Coca-Cola, Bank of America, Ford, J&J and AIG.
During more than a decade in Washington, DC, Dallas served as a press secretary on Capitol Hill prior to joining President Bush’s communications team initially leading outreach efforts for the President’s signature domestic policy initiative No Child Left Behind. Dallas would later deploy to Baghdad, Iraq on behalf of the White House to serve as a spokesperson for the Coalition. Upon returning from Baghdad, Dallas joined the communication team of Defense Secretary Donald H. Rumsfeld where he served as the Pentagon’s Director of Public Liaison for both Rumsfeld and his successor Secretary Gates. He serves today as the go to expert for media and emerging technology companies on the future of consumer media and advertising engagement in the new age of connected television viewing.
Dallas’ work has been recognized with the top honors for online campaign of the year; digital public affairs program of the year, corporate media campaign of the year and crisis communications program of the year. He has been named both the “Crisis Manager of the Year” by PR News and the “Social Media Professional of the Year”. PR Week named him one of the 40 most influential leaders in PR and PR News named him the 2022 Corporate Communications Professional of the Year.
Dallas was previously a commissioned officer in the United States Navy and earned a BA in Political Science from the University of California at Berkeley and a MA in Government from The Johns Hopkins University.
Cross Screen Media is a leading CTV activation managed service for marketers and agencies, built on a proprietary technology platform that enables advertisers to plan and measure advertising across Connected TV and audience-driven Linear TV at the local level. We seamlessly fit into existing workflows to help agencies scale, differentiate and deliver high-impact campaigns for their clients. For more information, visit CrossScreenMedia.com.
