A new connected TV company from one of the founders of Pluto TV will be out at the Cannes Lions Festival of Creativity looking for potential advertisers, who ultimately will be the backbone of its model. Telly, whose backers include Gary Vaynerchuk and programmatic ad company Mntn, is a connected TV device that is paid for entirely by advertising, meaning consumers do not have to pay to receive the device. 

The top half of Telly looks like any other TV—a 55-inch 4K display with Telly’s own operating system to host streaming apps such as Netflix, YouTube and Disney+. There is a built-in soundbar beneath the TV and a second smart screen at the bottom that is always on. That screen can display the weather, stocks, scrolling news headlines and sports scores.

On the right of the smaller screen is a section devoted to advertising. Images released to the press show ads for Pizza Hut and Kia, but the company stated these are not representative of participating brands. Occasionally, the ad expands across the entire bottom screen. Ilya Pozin, CEO and founder of Telly, told Ad Age the early look is just the beginning of possibilities for ad creative, which he imagines could include soda filling the screen, a car zooming across or even animations breaking the bounds of the second screen and sweeping up onto the main monitor.

Pozin also mentioned the possibility of the device including commerce, such as allowing users to shop, reserve movie tickets or order food from the screen, as well as direct click-through ads. For instance, a movie or show displayed on the smart screen might automatically open the appropriate streaming app to the advertised title when selected. The sound bar includes a camera that can be used to Zoom with friends or family while watching shows or movies together, to play interactive video games that the company likened to the Nintendo Wii or to track body movements for workout content.

Related: Walmart data to be used to personalize connected TV ads

While media buyers have voiced hesitations in committing to Telly this early, each expressed that it could potentially grow to become an intriguing player in the video advertising space should it reach scale. The buyers said early pricing is “fairly efficient” compared to competitors in CTV and FAST, and that the company was able to comfortably dispel any concerns about consumer privacy.

The media buyers independently told Ad Age that none of their clients had yet to commit ad dollars to Telly, which will begin shipping TVs to consumers this summer. 

“Before the iPhone, we had cameras and Walkmans and Garmin and all these different gadgets—they all went away; one thing destroyed all these other devices,” said Pozin. “We said, ‘What would a TV look like in 2023? What should it do, and why are all these other devices popping up around us when your TV is at the center of your living room? It’s the biggest screen—it should be doing that.”

Pozin, who has been developing the device and brand since May 2021, said the devices would retail for over $1,000 if sold the traditional route. Rather, the co-founder of Pluto took inspiration from the FAST business model.

Audiences were “paying for cable and then they’re watching ad revenue—if you actually look at how much people consume TV, the amount of revenue generated from the eyeballs surpasses the monthly [subscription] fee,” said Pozin. “So the hypothesis on Pluto was can you run and build a sustainable business model off of a single revenue stream, advertising alone? Everyone thought we were crazy.”

Now, Pluto boasts 80 million monthly active users, according to Paramount’s first-quarter earnings. The company also reported its direct-to-consumer ad revenue increased 15% year-over-year to $398 million, inclusive of Pluto and Paramount+. (Pluto was acquired by the media giant for $340 million in 2019.)

Pozin declined to discuss the amount of ad revenue needed to fund the venture. He compared the venture to Pluto’s growth, and said that profitability will be achieved “faster than you think.”

Telly’s reservation site is now active, and the first round of 500,000 TVs will ship this summer. To qualify to receive a device, participants will be asked to fill out a detailed consumer survey, which includes basic demographic information as well as what car the user drives, what restaurants they eat at and whether they participate in sports betting, among other questions. When the recipient receives their Telly TV, that information will then be relayed to the device to customize the experience for them. For instance, a user who bets on sports would see a sports betting tab on the smart screen.

Telly will also be able to use its sensors to detect how many people are viewing content and advertising, and will encourage continued participation in surveys through a rewards system that might build toward a free pizza or streaming subscription.

Pozin describes this as another important revenue source for Telly—offering hyper-specific first-party audience IDs for addressable advertising, and as a data resource that agencies will be able to implement into their planning, buying and measurement. While Telly will also offer third-party measurement (the company declined to share which partners, but said it would be the prominent players), Pozin pointed to its own dataset, which will be available from day one if the initial 500,000 sell out. The first devices will be granted to a strategic consumer base representative of a variety of geographic and demographic characteristics.

Former employees from Apple, Google, Amazon, Netflix and other companies helped build Telly, according to the company.

“We built our business by leaning into the trends shaping the future of consumer entertainment and brand engagement,” said Vaynerchuk, CEO of VaynerMedia, in a statement. “Gen Z and younger millennials live their lives today across multiple screens and only Telly unites those experiences into one incredible product offered at the perfect price point of free.”