Telly starts shipping its free ad-supported TVs to its first round of customers

Telly, the hardware startup that is giving U.S. consumers free dual screen smart TVs that are supported by advertising, announced today that it has started shipping its TVs to its first round of customers. The company says the customers in this initial wave have been invited to participate in its beta program, but did not disclose how many TVs it has shipped.

The TVs are free because of the constant ads that are displayed on the smaller second screen located below the 55-inch 4K TV. In exchange for the TV, you essentially have to pay for it with your personal information and viewing data. Telly requires users to give the company detailed information about themselves, such as their name, age, gender, home address and ethnicity, as well as viewing habits and purchasing behaviors.

Variety reports that customers must agree to conditions under the company’s terms of service. If someone doesn’t adhere to the terms of service, Telly can demand the TV be shipped back, otherwise the company will charge up to $1,000 to the credit card associated with the customer’s account.

Telly CEO Ilya Pozin told TechCrunch last month that 250,000 people registered for free TVs within the first two weeks of launching sign-ups. Telly says Gen Z and Millennial consumers made up two-thirds of Telly sign-ups.

The company plans to ship 500,000 free TVs to customers by the end of the year.

Telly announced today that it’s working with Nielsen to “collect and interpret first-of-its-kind viewership and ad effectiveness insights” for advertisers and TV programmers. Telly is also working with Microsoft, Magnite and MNTN to power the ads that play on the second screen.

The second screen displays advertisements 24/7 in the far right-hand corner. Another ad format is a news ticker that scrolls across the bottom. Telly says the ads are interactive, so users can use their remote to engage with them. The second screen doesn’t just display ads but also acts as the control center, allowing users to change channels, adjust the brightness, raise the volume and more. Although you can’t turn off the second screen, you can control the brightness so it’s not as distracting when you’re in a dark room.

“We are thrilled to begin shipping what is by far the smartest television ever built to consumers,” said Telly CEO Ilya Pozin in a statement. “The consumer and advertising community’s response has been incredible. Our disruptive ad-supported business model makes the television completely free to consumers, but the most exciting thing about Telly is the technology that enables our dual-screen television to get better with every update.”

Telly’s model essentially asks customers to give up a bit of their privacy in order to receive a free TV. The company claims that each TV is worth $1,000, so the payoff may be worth it for some people who are willing to cough up their data in return for a free TV.