Nothing wrong with the idea
It's the implementation and marketing that's poor. You can't just introduce built-in facial recognition as a standard feature and not expect a backlash.
The right way to do it would have been to ship the standard box without the camera, and have an add-on camera available for an extra £10 or so. Target it at families with selling points such as "Get suggestions that *you* want to watch, not your whole family", "Automatically block your kids from seeing adult content." and "Save energy by automatically powering off when you fall asleep in front of the TV"
Before long, you'll have parents wanting you to implement features that stop the TV from working when Little Johnny covers the camera, and casual users loving the extra convenience. When it's mainstream, you can quietly get bought out by Google without anyone batting an eyelid.