# Telly Financial Model

Telly gives away a free dual-screen smart TV and monetises via advertising on the built-in second screen.

- Canonical: https://finamodel.com/startups/telly
- Excel download: https://finamodel.com/startup-models/telly.xlsx
- Category: Media/Gaming
- Model type: Unit-economics / DTC
- Funding round: Seed

- Founded: 2023
- Geography: United States.
- Customer: B2C

## About the company

Telly offers consumers a free 55-inch 4K HDR dual-screen television. The main display handles streaming, while the always-on Smart Display shows contextual ads beside personalised weather, news, sports-score, and stock widgets; TellyOS adds games, fitness, voice, guide, and video calling.

Advertising on the second screen is the core business model, using CPM-priced inventory that remains available even when the primary television is off. The company cites a premium living-room CPM of $35-plus. Consumers pay nothing for hardware, so Telly absorbs device COGS and relies on DTC, retail, and strategic distribution partners.

The model should treat household adoption and active screens as the inventory engine, then build impressions, fill rate, CPM, hardware cost, fulfilment, and support. App partnerships, data licensing, and premium platform features are only future possibilities in the research, so they should not be assumed as current revenue.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

- 55" 4K HDR dual-screen smart TV given to consumers at zero cost.
- Primary screen: standard 4K streaming/OTA TV experience.
- Secondary screen ("Smart Display"): always-on bar that displays contextual advertising alongside personalized widgets - weather, news ticker, sports scores, stocks.
- TellyOS: Android-based OS with 8 built-in experiences - Game Room, Fitness (camera-based), Live Actions, Home Feed, Music, "Hey Telly" voice assistant, TV Guide, Video Calling (Zoom integration).
- Hardware specs: 55" 4K HDR display, premium 5-driver soundbar, HD camera, mic array, motion sensor, WiFi + Bluetooth, 3 HDMI / 2 USB inputs, 4K streaming stick included.
- Distribution: Direct-to-Consumer (online), Retail (demos/pickup), Strategic Partners (service providers, housing).

## Market

- US ad spend (total, forecasted 2022): $326B.
- Premium living room CTV CPMs: $35+.
- US TV viewing: 5.8 hrs/day per person spent watching TV and digital video.
- Ad-averse consumers: <25% prioritise paying for ad-free plans.
- Smart TVs sold in US (2021): 40M units.
- US households (2021): 120M+.
- TAM (Adults 25+): 180M+.
- Core Target: 107M+ households.
  - Segment 1: 65M+, ages 30–44, HHI $70k–$90k; 78% claim highest TV usage.
  - Segment 2: 42M+, ages 55–65, HHI $75k; 80% claim highest TV usage.

## Revenue model

- Primary: Display advertising on the always-on Smart Display second screen.
  - CPM-based inventory sold to advertisers; inventory is available even when the primary screen is off.
  - Ad formats: banner/display ads shown alongside personalized widgets; unobtrusive while viewer watches main screen.
- Secondary / future: TellyOS platform monetisation (app partnerships, data licensing, potential subscription upsells for premium features) implied by "back-end focus" framing, but no explicit revenue line shown.
- Hardware: Priced at $0 to consumer; COGS paid by Telly. No hardware revenue.
- Pricing unit: CPM (cost per thousand impressions) - $35+ for premium living room inventory cited as the market rate.
- Channels: DTC online, retail, strategic partners.

## Unit economics

- CPM floor: $35+ for premium living room inventory.

## Competition / moat

- Incumbents (Roku, Samsung, LG, Vizio, Fire TV) make no margin on hardware and compete on back-end software/ads.
- Telly's moat claim: the only TV with a dedicated, persistent second screen for advertising - competitors' ad surfaces are in-menu or require the TV to be in a specific state.
- Consumer "gimmicks" (curved, 3D, 8K) no longer drive upgrades; Telly positions free-TV as a genuine value unlock rather than a gimmick.
- CEO Ilya Pozin founded Pluto TV (acquired by Paramount; $1B annual revenue, 64M+ users) - direct CTV monetisation pedigree.
- No explicit competitive matrix in deck.

## Team & funding ask / use of funds

- Founder/CEO: Ilya Pozin - founded Pluto TV ($1B revenue, acquired by Paramount, 64M+ users); serial entrepreneur, 3 exits.
- CPO: Sascha Prueter (Google).
- Head of Strategic Partnerships: Matt Katrosar (CBS).
- Head of HW Product: John Hwang (Vizio).
- Head of Data Strategy: Bob Ivins (Nielsen).
- Head of Go-to-Market: Tarah Sinovic (Vizio).
- Head of SW Engineering: Eric Loes (Vizio).
- Head of Brand: Mathew Brian (Pluto).
- Head of Logistics: Jared Mellin (Peloton).
- Additional talent from: Roku, Square, IDEO, Meta, Comcast, Mindshare, Amazon, Uber.

## Recommended financial model

- **Archetype + why:** Ad-supported hardware / CTV unit economics model. The business is structurally a two-sided flywheel: subsidise hardware → accumulate hours of TV viewing → sell high-CPM display ad inventory. The correct model combines (a) a cohort-based TV unit deployment schedule, (b) an ad impression yield model (viewing hours × fill rate × CPM), and (c) a hardware COGS / subsidy waterfall showing the payback period per TV. A standard SaaS or 3-statement model alone would miss the hardware subsidy dynamic.

- **Forecast horizon & granularity:** 5 years (2023–2027); monthly for Year 1 (ramp-up critical), quarterly thereafter.

- **Key drivers & assumptions:**

| Driver | Value / Source |
| -- | -- |
| Smart TVs sold in US annually | 40M |
| US households TAM | 120M+ |
| Core target households | 107M+ |
| Market CPM (living room) | $35+ |
| Daily viewing hours per TV | 5.8 hrs |
| Hardware COGS per unit | ~$200–$300/unit based on 55" 4K commodity pricing; major model sensitivity driver |
| Units deployed per month (ramp) | 5k → 50k/month over 18 months; depends on supply chain and marketing spend |
| Ad fill rate | 40% Year 1, scaling to 70% by Year 3; comparable to early-stage CTV platforms |
| Effective CPM realised | $15–$25 net (discount to market rate of $35+; direct-sold vs. programmatic mix) |
| Smart display on-time per day | ~8 hrs/day (on while TV on + always-on ambient mode) |
| Ad slots per hour | 4 display impressions/hr on second screen (conservative; unobtrusive format) |
| Rev share / platform take rate | 100% Telly-owned if direct; 30% give-up if programmatic |
| Churn / TV lifespan | 7-year average TV replacement cycle; minimal churn once installed |
| Operating expense ramp | 80–100 headcount by end of Year 1 based on team slide seniority; $15M–$20M annual burn |

- **Scenarios (Base / Bull / Bear - which variables flex):**
  - **Bear:** Low fill rate (25%), high COGS ($300/unit), slow unit ramp (10k/month by Month 18), CPM realised $12.
  - **Base:** Mid fill rate (50%), COGS $220/unit, 30k/month by Month 18, CPM realised $18.
  - **Bull:** High fill rate (70%), COGS $180/unit (volume discount), 60k/month by Month 18, CPM realised $25, strategic partnership channel accelerates distribution.

- **Required sheets / outputs:**
  1. **Assumptions** - all drivers above with scenario toggle (Base/Bull/Bear).
  2. **Unit Deployment** - monthly TV units shipped, cumulative installed base, cohort table.
  3. **Ad Revenue** - installed base × daily hours × ad slots/hr × fill rate × CPM = gross ad revenue per period; net after rev share.
  4. **Hardware COGS** - units shipped × COGS/unit = cumulative hardware subsidy; break-even analysis (how many ad-months to recover COGS per TV).
  5. **P&L** - Revenue (ads), COGS (hardware subsidy amortised or expensed), Gross Profit, OpEx (headcount, logistics, marketing, tech), EBITDA.
  6. **Cash Flow / Runway** - working capital requirements (hardware is cash-out on delivery, ad revenue lags); funding need.
  7. **Unit Economics Summary** - LTV per TV (NPV of lifetime ad revenue per unit) vs. COGS per unit; payback period in months.
  8. **Dashboard** - KPI cards: installed base, monthly ad revenue, CPM realised, fill rate, cumulative hardware spend, payback month.

## Frequently asked questions

### Is the Telly financial model free?

Yes. The Telly model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.