Back in the dim ages, twenty years ago at the dawn of the century, someone came up with the dubious idea of embedding tiny computers in appliances. The typical example was that your refrigerator could tell you if you needed milk or if you had all of the ingredients to make your desired meal. Your “smart” refrigerator could tell you this even if you were at work, using that growing fad called the Internet.
People were intrigued, but then nothing really came of it—it didn’t catch on. And so people laughed at the momentary idea of the smart appliance.
How naive we were.
Years passed, but the idea of a smart home persisted, albeit limping along. You could build a semblance of a smart home, and impressively so. But it was the Wild West. You had to cobble together the pieces, and build your system, and continually tinker with it. It was like taking a minivan and building a camper conversion inside it. It was not for the faint of heart.
But then companies realized something. If they sold you a smart appliance, there were multiple ways to monetize it. They could try to charge you a subscription to use a smart device and make some money that way, for instance.
And they realized something much more profound. Selling a smart device was a two way street. You see, we used to be an agrarian economy, and then an industrial economy, and now an information economy (and arguably also an attention-based economy). So if companies could sell customers a smart device and then use it to gather information on customers’ habits, trends, preferences, and so on, there was money to be made. So they did just that. The industry re-christened the smart home device market as the new Internet of Things (IoT), and got to work on products.
An IoT device can be your refrigerator. Or an internet coffee pot. Or a network thermostat. Or a video doorbell. Or even a television.
Most of us have smart TVs. And we buy pretty impressive screen sizes and display resolutions for low prices. But what you may not realize is that you pay in other ways. Those smart TVs capture your viewing habits and trends, and your TV manufacturer sells that information to companies. These other companies use your information to help created targeted advertising and marketing. The TV manufacturers “make it OK” by ensuring that your information is made anonymous and put together with everyone else’s data to make it further anonymous. Theoretically, at least.
The CEO of Vizio not long ago was quoted as saying that if his company didn’t collect viewer information, they’d never be able to sell TVs so cheaply. Viewer data makes up for the money TV manufacturers “lose” from selling you a TV at such a low price. That’s IoT, very profitably monetized.
A consultant friend once told me that a client had a cool IoT device, but they couldn’t figure out how to make money from it. Her advice to them? Set it up so that they could gather customer data from the IoT device, and then sell it. She said they’d make far more than selling the device alone.
In our next post, we’ll discuss why things are about to get big for the IoT market, and why big companies are in a battle over your ultimate privacy.