How do TV manufacturers make money selling cheap televisions?
Increasingly, not from the television. Hardware margins on mainstream sets are thin to negative, and the business has shifted to what the set does after it is in your living room.
The revenue streams:
Advertising on the home screen. The interface itself is inventory — banners, sponsored rows, promoted apps and full-screen video. This is now a substantial, high-margin business for the largest platform owners.
Automatic content recognition. The set samples what is on screen — regardless of source, including a games console, a set-top box or an external stick — and matches it against a database to identify what you are watching. That viewing data is sold for audience measurement and, importantly, used to target advertising back at you both on the TV and on other devices linked to your household.
Free ad-supported channels. Manufacturers run their own streaming services with linear-style channels, keeping the advertising revenue.
App placement fees and revenue share, paid by streaming services for prominence, pre-installation and a dedicated remote button — those branded buttons are sold.
Content and subscription referrals, taking a cut of signups and rentals.
Operating system licensing, where a platform owner licenses the software to other manufacturers and shares the resulting revenue.
Why this changes the product. It explains why televisions have become slower to start, more insistent about connecting to the internet, harder to use without an account, and prone to acquiring new advertising placements via firmware update. The economics reward engagement with the platform, not picture quality.
What you can do:
Decline data collection during setup, and look for options named after the manufacturer's recognition technology rather than "advertising".
Revisit privacy settings after updates, which sometimes reset or add options.
Do not connect it to the internet at all, and use an external streaming device — which also gets updates for longer than most TVs do.
Check what a "smart" TV does offline before relying on it.
Business displays and monitors are the ad-free alternative, at a higher price for less hardware — which is the whole point.