...it doesn't.

Like, Apple knows what you're watching within the Apple TV app obviously.

But it's certainly not taking screenshots every second of what it displaying when you use other apps -- which shows and ads you're seeing. Nor does Apple sell personal data.

Other video apps do register what shows you're in the middle of, so they can appear on the top row of your home screen. But again, Apple's not selling that info.

Having each app report what is going on vs figuring it out from a screenshot locally is the same from a privacy POV.

But I do trust apple more

A lot of this stuff is actually being used to track which ads are being watched. Apps definitely aren't reporting those.

Like all data collection you can bet that the data our smart TVs and devices take from us is (or one day will be) used for a lot more than just ads.