Samsung TVs start inserting ads into your movies

Thought you could watch that video on your local hard drive without ads? Think again: A number of owners of Samsung’s smart TVs are reporting this week that their TV sets started to interrupt their movie viewing with Pepsi ads, which seem to be dynamically inserted into third-party content.

“Every movie I play 20-30 minutes in it plays the pepsi ad, no audio but crisp clear ad. It has happened on 6 movies today,” a user reported on Reddit, where a number of others were struggling with the same problem.

Reports for the unwelcome ad interruption first surfaced on a Subreddit dedicated to Plex, the media center app that is available on a variety of connected devices, including Samsung smart TVs. Plex users typically use the app to stream local content from their computer or a network-attached storage drive to their TV, which is why many were very surprised to see an online video ad being inserted into their videos.

Samsung accepted the blame for the ad a day after this story originally published, with a spokesperson telling me it was an error that was confined to TVs sold in Australia:

[blockquote person=”” attribution=””]”We are aware of a situation that has caused some Smart TV users in Australia to experience program interruption in the form of an advertisement. This seems to be caused by an error, and we are currently conducting a full and thorough investigation into the cause. This situation has been reported only in Australia. We would like to apologize for any inconvenience this may have caused.”[/blockquote]

A Plex spokesperson had previously assured me that the company has nothing to do with the ad in question. It looks like the Pepsi ad isn’t just making an appearance within Plex. Subscribers of Australia’s Foxtel TV service are reporting that streams watched through the Foxtel app on Samsung TVs have been interrupted by the same commercial. A Foxtel employee responded to these reports by saying that “this absolutely should not be happening and is being escalated immediately.”

It looks like the ad insertion was accidentally turned on by default for apps that it wasn’t actually meant for, but the faux pas points to a bigger issue: Device makers like Samsung have long tried to figure out how to monetize their platforms and generate additional revenue in a time where margins on hardware are slim at best.

Samsung initially tried to sell ads on its smart TVs, but shuttered its paid app store for the big screen a year ago because it realized that most people simply didn’t want to pay for TV apps. Another popular idea in the industry has been to monetize smart TV platforms through media services — but it turns out that isn’t all that easy either, especially at a time where most people are perfectly happy with just using Netflix, Hulu or Amazon Prime Instant.

To its credit, Samsung caught on to this shift in consumer behavior earlier than others as well, and shuttered its movie rental service last July. The last option for Samsung is to monetize third-party apps — and the company isn’t alone in trying. Roku has been particularly aggressive with ad and revenue sharing agreements, but I’ve been told that almost all platforms are trying to strike some kind of deal with more successful developers to either run ads against their content or get a cut of their revenue.

Consumers rarely ever get to know about these deals — unless something goes wrong, which seems to be exactly what happened in the case of that Pepsi ad that popped up on Samsung TVs this week. That’s bad, because there are other issues at hand than interruptions from unwelcome ads. Who, for example, gets what kind of data when TV manufacturers strike deals with advertisers? And how can consumers opt out of data collection altogether?

Coincidentally, the Pepsi ad started to pop up on Samsung TVs a mere day after the company was in the hot waters over another smart TV-related privacy mishap: Earlier this week, an owner of a Samsung smart TV discovered that the company’s privacy policy included warnings not to disclose private information in front of the TV, with the implication that the device might be listening in on our all your conversations. Samsung has since clarified that this isn’t the case — the device is only capturing voice commands when you press the microphone button on your remote control, and otherwise using hot words to monitor for voice commands.

But the incident clearly indicated that companies like Samsung have to be more transparent about the data collection capabilities of their devices. The Pepsi app just seems to be the icing on the cake, urging the company to get serious about this now.

This story was updated on 2/11/2015 with a statement from Samsung.