Vizio Latest Manufacturer To Offer More Ways For TVs To Watch Purchasers

Vizio is the latest consumer electronics manufacturer to announce -- publicly, but not, like, PR-onslaught publicly -- that its TVs will be watching purchasers as much as purchasers are watching them. The details of its strategy to generate the most ROI from each and every purchaser willing to blow past the fine print during setup are contained in the company's SEC filing for its debut as a public company. Engadget's Richard Lawler has the details. (h/t to Techdirt reader MarcAnthony)

According to the filing, Vizio has sold more than 15 million smart TVs, with about 61 percent of them connected as of the end of June. While viewers are benefiting from those connections, streaming over 3 billion hours of content, Vizio says it's watching them too, with Inscape software embedded in the screens that can track anything you're playing on it -- even if it's from cable TV, videogame systems and streaming devices.

Here's the potential shareholder-friendly description included in the S-1 filing:

Our Inscape data services capture, in real time, up to 100 billion anonymized viewing data points each day from our over 8 million VCUs. Inscape collects, aggregates and stores data regarding most content displayed on VCU television screens, including content from cable and satellite providers, streaming devices and gaming consoles. Inscape provides highly specific viewing behavior data on a massive scale with great accuracy, which can be used to generate intelligent insights for advertisers and media content providers and to drive their delivery of more relevant, personalized content through our VCUs.

And here's the grand plan, which is a slice of a multi-billion dollar data sales market:

We believe our business focus enables a self-reinforcing consumer use and engagement model that we expect to fuel our growth while driving revenue. Our connected entertainment products and discovery and engagement software increase usage of our platform, enabling Inscape to gather more anonymized data on viewing behaviors, which we can deliver to advertisers and media content providers. These companies in turn can deliver more relevant and personalized content for viewers, further enhancing the entertainment experience. We believe this self-reinforcing cycle will increase our brand awareness and enhance demand for our connected entertainment products.

What's curious about the wording isn't the gung ho appropriation of viewer data to sell to advertisers. What's curious is Vizio's claim that "anonymized data" will result in "more relevant and personalized content" for purchasers. There may be a certain level of anonymity involved, but Vizio still needs to provide enough defining demographic data to make this information worth purchasing. There is some value in general data like number of viewers of specific content at certain times, but Nielsen has done this sort of thing for years and it's a huge stretch to call anything about TV advertising "personal" or "relevant." So, there's something a bit off about the anonymization claims Vizio is making here.

The other issue is that while Vizio is being upfront with regulators about this aspect of its TV offerings, it's not being similarly explicit with purchasers. It is truly the rarest of customers that seeks out a television for its ability to offer "personalized content" in exchange for the sale of his or her viewing data to marketers.

Will users know Vizio is selling their viewing data, including that generated by third-party devices connected to a Vizio smart TV? Probably not. While Lawler noted on Twitter than the SEC filing contains 102 mentions of Inscape, the term fails to surface in searches of Vizio's website. There's also nothing referencing the service in its Privacy Policy.It's not as though this is a feature (which many purchasers would find closer to a bug) still in development. Vizio's own filing indicates this is already in use. While it may be proudly trumpeting its built-in spyware to potential shareholders, it seems a bit more reluctant to inform potential purchasers about the company's thirst for sellable data.

Far too many electronic device manufacturers are unwilling to honestly discuss this part of the business with paying customers, preferring pages and pages of legalese to do the talking for them -- a tactic that allows for both ass-coverage and obfuscation. Vizio does better than some by providing instructions on how to disable this on-by-default "interactivity" early on in its Privacy Policy, but that doesn't necessarily excuse yet another manufacturer that views paying customers as ongoing revenue streams long after they've collected the purchase price for the device. In today's electronics market, it's not enough to simply be a paying customer. You must also be the product as well.

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