Samsung has long been a giant in TV manufacturing, but falling prices and shrinking profit margins have hit the company’s bottom line. As a result, it’s reportedly testing programs that would add new advertisements to the main menu bar of its higher-end televisions. The program is currently only active in the US but is expected to roll out to Europe as well.
The Wall Street Journal reports that this move isn’t confined to top-end televisions from 2015 or 2016; Samsung is exploring adding software updates to older models that would introduce advertising on those platforms as well. The push to monetize TVs in this way comes from Executive VP Lee Won-jin, who Samsung hired away from Google, and is part of a push to shift away from hardware sales as a primary profit generator and towards other forms of revenue. The WSJ reports that these ads are displayed on the home page next to prominent apps. When Samsung introduced advertising in 2012, the ads were only shown if the user first clicked the apps button. Samsung claims it places ads “to deliver relevant brands and content to consumers.”
Once upon a time, smart TVs were hailed as the future of technology, a seamless mesh of computing capability and consumer benefits. These new televisions were touted as potential game consoles, DVRs, and capable of displaying additional information about a game, film, or video. Instead, they’ve been used to gather data on consumers, offer terrible security, and now, are being sold as advertising platforms.
These new changes are just another example of how tech companies have warped both privacy norms and acceptable behavior. Twenty years ago, no company would’ve dared launch a television that cost several hundred dollars and bombarded you with manufacturer-created advertising. Samsung dodges this by claiming to offer “relevant brands and content,” which means it’s either monitoring everything you watch (in order to deliver “relevant” content) or it’s just bombarding you with ads that make some minimal effort to calculate your likes based on home location and demographic data. The first is an invasion of privacy and the second is unlikely to be relevant and extremely annoying.
Samsung has no intention of changing its course. LCD sales have slumped badly this year and are down 20% quarter-on-quarter and 6.3% year-on-year. 4K panels have not driven the upgrade craze that 1080p created. Quantum dot technology is still fairly new and OLEDs are still too expensive to drive mass market adoption. Given these facts, Samsung no longer believes that better technology is the key to increased profitability.
“We’re likely to see a host of new devices that allow users to consume video content in various ways, which leads to thinking that competition which has centered around picture quality, will change significantly.” That’s according to Kim Hyun-suk, the head of Samsung’s TV business, who recently spoke at a press conference. Advertising options, not superior picture quality, is what Samsung thinks will differentiate its televisions.
I actually agree with Samsung, 100%. If it differentiates its products based on how much data it can gather on them or the advertising revenue they generate, it’ll certainly put its TVs in the “Do not purchase” category for me. In fact, there’s basically no reason to hook a television to the Internet, ever, without simultaneously implementing a firewall to block communication with unapproved sources. Samsung’s advertising servers, whatever they might be, are the very definition of “Unapproved.”
Or just buy an old-fashioned “dumb” TV without any of these nifty new features. That’s an equally valid solution as far as we’re concerned. And while Samsung is far from the only manufacturer including advertising on their televisions, their status as a major player in the industry means more companies will follow this trend if it catches on.