'15,000 Merits' And The Evolution Of A Two-Tier System For TV

The Black Mirror episode “15,000 Merits” envisioned a world where people are surrounded by advertising and every surface becomes a screen. The only way to get rid of the ads is to pay, using a currency called “Merits” (hence the title.)

We are in some danger of realizing that sort of a world today, where more affluent audiences can pay to avoid commercials by opting for the ad-free version of streaming apps, while less affluent audiences remain on traditional pay TV or broadcast TV with 16 minute-per-hour ad blocks.

This isn’t just an American problem either, something Netflix and other U.S.-based streamers have learned the hard way as they’ve attempted to take on the developing world.

Take India, for example, where few viewers can afford to pay the approximately $10/month (US) that Netflix is asking for the full ad-free version of the service or even the $5 they want for the mobile-only version. Instead, cash-strapped viewers are opting for Hotstar, the (extremely) ad-supported streaming app that Disney inherited from Sky, which starts at just 40¢/month.

This bifurcation is not expected to be permanent. As the industry moves to streaming, the idea is that better targeting will create an ad-supported ecosystem featuring fewer, better-targeted ads that viewers won’t mind watching and brands will pay more money for.

While that is the hope, the shift is not expected to happen overnight (too many moving pieces), and so in the interim, we’ll have to deal with this two-tier system where brands have an easy time reaching less affluent consumers on traditional linear TV, but struggle to find ways to connect with more affluent viewers whose diet consists largely of ad-free streaming.

Now in an environment where the same programming was available on both streaming and linear, this would probably not be much of a problem: streaming TV apps are not, taken singly, all that expensive and given that subscriptions are still monthly, it’s easy enough to imagine fans of a specific show paying seven or eight dollars a month to watch them ad free regardless of income level.

The problem is that we currently have a two-tier system of programming as well.

The various networks all create different programming for linear than they do for streaming. And this creates the distinct impression that the “good” shows are all on streaming, the ones that are going to win all the awards and get all the press, while the shows the network executives are less enamored with, the ones they regard as filler, wind up on linear.

Call them “blue shows” and the “red shows” for argument’s sake. 

Blue shows appeal to educated coastal viewers while red shows appeal to more mainstream viewers, people who don’t use the word “camp” when describing the Real Housewives franchise and are emotionally invested in which bachelorette gets the rose this week.

This wasn’t always true—early reality shows like Survivor were popular with all audiences, but it’s definitely become the case as of late, and the same audiences that are unaware of reality TV are similarly unfamiliar with all of the sitcoms, crime procedurals and dramas that populate primetime TV, the ones whose ratings seem to drop weekly, despite pulling in millions of viewers.

This bifurcation may be changing though, as streaming services realize the need to reach beyond the blue “HBO audience” if they are going to succeed.

Netflix has been attempting to do this for a while, though at the cost of being dismissed by those who were not fans of the service’s more ecumenical fare, which led to the perception, maybe not widespread, but not uncommon either, that, while the service had a few gems, much of what was on Netflix was rapidly becoming “crap.”

That may be changing some thanks to the success of Bridgerton, the Shonda Rhimes series that, as the name unintentionally implies, bridges the gap between first round Netflix original series like Orange Is The New Black and the more accessible fare that's commonly found on primetime network TV.

It remains to be seen however, if Netflix and the other Flixes can recruit the sort of viewers who found series like BoJack Horseman and Transparent too “blue” (in all senses of that word) while not alienating the audiences that were thrilled to discover that shows of that caliber were actually being produced on American TV.

If both types of audiences can find a home on the same streaming services, then the bifurcation of TV’s audiences will be greatly diminished. (And I should note that few people fall firmly into just a single camp here--it’s generally shades of gray, with people leaning more towards one side than the other.)

That said, it’s just as likely that the various Flixes and FASTs will become home to very specific styles of programming, and that their audiences won’t overlap. It’s easy to get everyone on the same page when you’re talking about just four networks. Much tougher when programming is dispersed over nine Flixes, more than a half dozen FASTs and dozens of niche services.

The streaming ecosystem is far too new to actually make a call on how this will all work out, as the rapidly shifting attitude of the various networks towards their linear programming will play a major role here in the outcome.

Will they move to create synergy between their streaming and linear lineups so that they’re one and that same? Or will they keep linear separate, cutting back on production budgets and eventually the types of programming available as audiences and ad dollars melt away?

Something to keep an eye on for sure and something that will have a major impact on the future of all media, not just TV.

Read Part 1 in this series: The Only Question Worth Asking

Read Part 2 in this series: Linear Television Is Here To Stay. Where Is Another Story