Telly, the TV hardware startup led by Pluto TV co-founder Ilya Pozin, is shaking up industry business models by offering 500,000 smart TVs free to consumers willing to watch 24/7 ads on a split screen with streaming TV shows and movies. The ad-subsidized sets feature a dual-screen that includes a 55-inch 4K HDR display with a nine-inch “smart screen” mounted beneath. The smaller screen is where the ads will appear, running alongside feeds featuring information such as weather, stock reports, and sports scores. Powered by TellyOS, the sets also have a built-in five-driver soundbar.

The company has started taking reservations for the U.S. at FreeTelly and will begin shipping sets this summer, according to a news release that says Telly has emerged from “stealth mode” poised to have advertisers fully subsidize the cost of its television sets for consumers.

Calling his new venture “the biggest innovation in television since color,” Pozin said that “for too long, consumers have not been an equal part of the advertising value exchange. Companies are making billions of dollars from ads served on televisions, yet consumers have historically had to pay for both the TV and the content they watch. All of that changes today.”

“Since the extra screen is a lot smaller than the main screen, and the ads only take up a quarter of it, there are users who can likely train their eyes to ignore the ads altogether,” writes TechCrunch, noting that some may find it too distracting, “plus, the other trade-off is agreeing to give Telly certain data.”

Pozin emphasized the technological sophistication of his new set:

• Smart Screen: In addition to the informational feeds, “Telly’s artificial intelligence helps deliver reviews and content recommendations, all on one device” and provides a voice assistant that responds to “Hey Telly.”
• Video Calling: Allows viewers to hold work meetings or watch content together with friends and family.
• Video Games: Telly’s “Game Room” is programmed with more than 40 video games, from arcade classics to immersive multiplayer experiences.
• Fitness: Telly is equipped with advanced motion-tracking for its complement of fitness programs.

“Users can use controllers, remotes or their own bodies to use the features,” writes TechCrunch, adding that “Telly’s AI-powered voice assistant allows users to set timers, ask questions and more. For instance, users can watch their favorite football game and ask ‘Hey Telly’ to bring up their fantasy football roster, which will appear on the bottom screen.”

Telly TVs “will ship with an Android TV streaming stick, and consumers can also plug in other connected devices like Roku, Amazon Fire TV and Apple TV,” TechCrunch says.