Sort of - but not quite.
Think of it like this; people are concerned that the system can do Who, What, When, Where, Why, How, How-Much, Who-do-they-know,... etc,...
It cant. Surely things can be inferred... but nothing that should get you riled up any-more-so than any other online service you have ever used. Plus - the opt-out functions actually work.
Aren't there digital watermarks on all broadcast TV shows and advertisements? If not, if there's a fingerprinting algorithm that can run on a screen's hardware, or filename matching for USB, media could still be identified. No need for the rest of "the system" to have video files in advance, or at all.