Roku City, the oddly alluring cityscape screen saver, scrolls across millions of idle TVs every day. Recently, an island paradise appeared in the picture. In the foreground, a floating billboard invited me to subscribe to Disney+ and watch Moana 2 at the press of a button on my remote. The convenience, I don’t mind about the new era of ad-supported everything. The wiretapping, I do.

Ads are obviously not new on TV. As long as we’ve been watching shows on glowing boxes, we’ve been watching commercials that provide the economic engine for the entire entertainment factory to operate. While streaming platforms offered a reprieve for a few years by charging monthly fees for commercial-free content, it’s now practically impossible to watch TV without seeing some sort of marketing. What’s happening more under the radar is that your TV is collecting data about you and your watching habits — sometimes by directly monitoring what’s on your screen — and serving you personalized ads on your TV or elsewhere.

The screen that you once loved for private, uninterrupted Netflix-watching has become a big billboard that also spies on you.

This isn’t just a Roku problem, although the company found itself in hot water when some users were recently required to watch a video ad — a Moana 2 trailer — before they could access their TV’s home screen at all. Roku says this is just a test, but the fact that it’s similar to a feature Amazon rolled out over a year ago on Prime Video suggests that ads are generally getting more brazen on streaming platforms. How you feel about it depends a lot on your mindset and feelings about privacy.

Your TV wants your data

The TV business traditionally included three distinct entities. There’s the hardware, namely the TV itself; the entertainment, like movies and shows; and the ads, usually just commercials that interrupt your movies and shows. In the streaming era, tech companies want to control all three, a setup also known as vertical integration. If, say, Roku makes the TV, supplies the content, and sells the ads, then it stands to control the experience, set the rates, and make the most money. That’s business!

Roku has done this very well. Although it was founded in 2002, Roku broke into the market in 2008 after Netflix invested $6 million in the company to make a set-top box that enabled any TV to stream Netflix content. It was literally called the Netflix Player by Roku. Over the course of the next 15 years, Roku would grow its hardware business to include streaming sticks, which are basically just smaller set-top-boxes; wireless soundbars, speakers, and subwoofers; and after licensing its operating system to third-party TV makers, its own affordable, Roku-branded smart TVs.

While most people think of Roku as a hardware company, it actually transitioned into becoming an advertising company almost a decade ago. In the early days, you might see a banner ad on your home screen or a tile telling you to watch Game of Thrones on HBO Go. But after firing up a more serious ad business in 2016, Roku started selling targeted ads on the Roku Channel, a free, ad-supported TV (FAST) service across its devices in 2017. Roku even started making its own content, including a biopic of Weird Al Yankovic.

Things really ramped up when Roku started acquiring ad-tech companies, including Nielsen’s Advanced Video Advertising business in 2021. This helped Roku gain new insights into its audience in order to target ads better and ultimately charge more money for those ads. At the end of 2024, Roku reported annual ad revenues of $3.5 billion, which accounted for 85 percent of its total revenue — far higher than its hardware business. Roku also has 90 million users — millions more than Apple TV+ — who have become a gold mine of data, not just about what they watch on TV but also who they are and what they like. Today, it’s better to think of Roku not just as an advertising company or the folks who make cheap TVs and streaming sticks, but also as a data company with millions of detailed profiles.

Regarding the Moana 2 controversy, Roku said in a statement that the company’s growth “has and will always require continuous testing and innovation across design, navigation, content, and our first-rate advertising products.” The statement also said, “Our recent test is just the latest example, as we explore new ways to showcase brands and programming while still providing a delightful and simple user experience.”

The shift toward ad-supported everything has been happening across the TV landscape. People buy new TVs less frequently these days, so TV makers want to make money off the TVs they’ve already sold. Samsung has Samsung Ads, LG has LG Ad Solutions, Vizio has Vizio Ads, and so on and so forth. Tech companies, notably Amazon and Google, have gotten into the mix too, not only making software and hardware for TVs but also leveraging the massive amount of data they have on their users to sell ads on their TV platforms. These companies also sell data to advertisers and data brokers, all in the interest of knowing as much about you as possible in the interest of targeting you more effectively. It could even be used to train AI.

The wealth of Roku’s first-party data could be a gold mine for Amazon or Google, according to Laura Martin, an analyst at the investment bank Needham and Company. “Roku is the perfect size with a really strategic fit,” Martin told me, referring to a possible Amazon purchase. She added that Roku’s data could also be a boon for any company with AI ambitions, including OpenAI. “If I was a large language model, this is data I would absolutely want to own.”

The streaming industry has faced a reckoning in recent years too: After years of prioritizing growth over all else, companies like Netflix and Disney finally had to start making money. That’s resulted in those companies charging more, bundling services, and introducing cheaper ad-supported tiers.

For better or worse, ads are the future of the TV business, just as they were its past. “For consumers, it’s definitely a complicated ecosystem,” said Jon Giegengack, founder of Hub Entertainment Research. Giegengack argues, though, that this ecosystem is ultimately better for consumers. In effect, there’s a streaming option that works for any budget, and ads fill in the gaps.

But not everyone is thrilled to be bombarded by ads and to have their data passively harvested. More ads also means less attention paid to the content you want to watch and more to the ads these companies want you to see.

Nevertheless, the trade-off is worth it to a lot of Americans. Some 43 percent of all streaming subscriptions in the United States were ad-supported by the end of last year, according to the market data firm Antenna. Even if you pay for an ad-free tier, you’re contributing to the ad ecosystem by giving up your data to whatever streaming platforms you use and even the company that makes your TV.

Is it possible to escape the ads?

Breaking free from this ad prison is tough. Most TVs on the market today come with a technology called automatic content recognition (ACR) built in. This is basically Shazam for TV — Shazam itself helped popularize the tech — and gives smart TV platforms the ability to monitor what you’re watching by either taking screenshots or capturing audio snippets while you’re watching. (This happens at the signal level, not from actual microphone recordings from the TV.)

Advertisers and TV companies use ACR tech to collect data about your habits that are otherwise hard to track, like if you watch live TV with an antenna. They use that data to build out a profile of you in order to better target ads. ACR also works with devices, like gaming consoles, that you plug into your TV through HDMI cables.

Yash Vekaria, a PhD candidate at UC Davis, called the HDMI spying “the most egregious thing we found” in his research for a paper published last year on how ACR technology works. And I have to admit that I had not heard of ACR until I came across Vekaria’s research.

“They haven’t kept it secret, but there’s no awareness about it,” Vekaria told me. “So if people don’t know, they will not question it.”

While ACR is popular across platforms, Roku is especially excited about the technology. Many of the companies that Roku has acquired in recent years have been working on ACR, and a Roku-owned company won an Emmy in 2023 for its work on the technology. Roku has also said that, because its share of the TV operating system market is 40 percent, the scale of its data collection capabilities is “unparalleled.”

Unfortunately, you don’t have much of a choice when it comes to ACR on your TV. You probably enabled the technology when you first set up your TV and accepted its privacy policy. If you refuse to do this, a lot of the functions on your TV won’t work. You can also accept the policy and then disable ACR on your TV’s settings, but that could disable certain features too. In 2017, Vizio settled a class-action lawsuit for tracking users by default. If you want to turn off this tracking technology, here’s a good guide from Consumer Reports that explains how for most types of smart TVs.

To be honest, after learning about all this in the past week or so, I haven’t done anything revolutionary. I can actually buy into the idea that more relevant ads provide a better experience. I don’t need to see ads for a dozen different eczema treatments while I’m watching YouTube TV, because I don’t have eczema. I’m okay learning about a new toy for young kids, because I have a young kid. (Advertising to kids — or even letting your kids watch YouTube — is an entirely different matter.) So I’ve agreed to all the privacy policies and am enjoying my streaming content as the industry intended.

But it does bug me, just on principle, that I have to let a tech company wiretap my TV in order to enjoy all of the device’s features.

If you’re set on an ad-free TV experience, your best bet is to buy an old dumb TV off eBay and never connect it to a Roku, Amazon, or Google device. You can buy an antenna for network television, and a DVD player for movies. There are worse Y2K trends to resurrect than being completely offline for a few precious leisure hours.

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