A new entrant into the consumer electronics market, Telly, today is giving new meaning to the term FAST – free, ad-supported television – with the first two-screen smart TV that’s also free to consumers. The set eliminates the cost to viewers by showing paid advertising. The device has a high-definition display for watching movies and shows, a built-in soundbar and a separate screen for interactive features such as video calling.

The invention is the latest brainchild from Ilya Pozin, the co-founder of the FAST platform Pluto TV, which Viacom acquired for $340 million in cash four years ago. In the same way that Pluto TV dispensed with cable and streaming subscription fees, Telly is getting rid of the cost to buy a TV screen. In both cases, advertisers pay for a chance to get their brands in front of viewers.

“Can you build a business where you take the hardware cost away completely, and have the entire revenue stream and business model subsidized by the advertisers? The answer is ‘yes,’ and that’s what we’re doing with Telly,” Pozin, founder and chief executive of Telly, said in this interview with Beet.TV’s Andy Plesser.

Telly is taking reservations for its first 500,000 TV sets at its www.freetelly.com website. The TVs will be shipped to households for free this summer. Users only need an internet connection to set up a Telly set and start streaming smart TV apps.

“You share some information about yourself and your household, and based on information, we’re able to deliver relevant advertising to you,” Pozin said.

Telly’s launch comes as other makers of smart TVs such as Samsung, LG and Vizio expand their sales of advertising, harnessing viewer data to help marketers reach key consumer groups in a way that also protects data privacy.

Performance Advertising

As viewers watch shows on the top screen, they can see more information about the programming on the lower screen and messages from sponsors.

“Let’s say you’re watching a football game and you see an ad on the bottom screen for pizza, let’s say it’s Pizza Hut,” Pozin said. “You can actually pick up your remote and purchase a pizza.”

That direct-response mechanism gives advertisers a way to drive immediate orders for their performance marketing campaigns. For brands that are seeking business outcomes, Telly is provided interactivity on the biggest screen in most households.

“With Telly, we’re seeing an amazing, tremendous response from both brands and agencies and being able to bring in the dollars that are spent on web and mobile finally into the living room where they want to be,” Pozin said. “Unlike your traditional 15-second and 30-second ads in between content, what advertisers love about our bottom screen and being able to advertise on that device is the ads…you can engage on them.”

Viewers can interact with the screen through voice command, remote control or mobile app. The set uses artificial intelligence to provide recommendations to viewers based on their preferences. It also offers video calling, co-watching features, video games, music streaming and fitness programs with motion tracking.

In addition to streaming video, viewers can also watch programming from a cable or satellite TV provider by hooking up a set-top box to a Telly device, which has three HDMI ports and a built-in tuner. Telly also ships with a 4k Google TV streaming stick, but consumers can hook up other streaming devices made by Roku, Amazon or Apple, among others.

Telly may eventually start selling its dual-screen sets through retail channels, Pozin said.

“We’re finally introducing the first truly smart TV into the marketplace,” he said. “This thing is just going to dominate all the other TVs. It’s the best device in your home by far.”

“While everyone talks about Smart TVs, the reality is that TVs have not changed dramatically over the past couple of decades and the dream of truly interactive TV has never materialized,” Richard Greenfield, general partner at LightShed Ventures, which co-led Telly’s latest funding round, said in a statement. “The groundbreaking dual-screen design enables advertisers to completely reimagine the living-room experience.”

“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,” Gary Vaynerchuk, chief executive of Vayner Media, said in a statement. “We are thrilled to be an early launch partner with Telly helping our clients create an entirely new form of brand engagement that is truly valued by the consumer.”