People like subsidized stuff. People who subsidize things like to do it only when they are paid more than the subsidies they give and they are paid based on who they subsidize because the people who are paying the subsidizers must go to the subsidized people and take their money for the subsidies.
It's a rock-solid business model with a requirement to know your customers, it's not going away unless a better alternative is invented.
But consumers are not being informed that they’ve bought a subsidized tv. For example, Several salespeople have told me in the past few weeks that none of their TVs serve ads. Looking deeper into the TVs the salesperson was clearly wrong. Few consumers even know to ask the question. Even fewer know that the sales guy is wrong.
Businesses don't leave money on the table. "Smart" features don't subsidize the purchase price, they just add to the margin. If companies tacitly collude to keep dumb TVs off the market, surveillance is a tide that will lift all of their boats.
This is specifically about privacy, which relates to targeting and tracking, not all ads. Most user data is completely useless to advertisers, but there is a mania for it right now. Perhaps it will end when ML people from CS backgrounds learn Bonferroni.
How I see it is an optimization problem about paying a downpayment to get your device and after that paying instalments through purchases of unrelated goods and services down the line.
The advertisement agencies are the creditors and the debt collectors and they try to optimize for accuracy of targeting. The more accurate they are the ticker is their margins.
It's a rock-solid business model with a requirement to know your customers, it's not going away unless a better alternative is invented.