There might be some good news on binge drinking in the UK as the latest year’s official figures showed lower rates of heavy drinking.11 The percentage of men exceeding the government’s daily sensible drinking benchmarks (three to four units on at least one day in the previous week) fell from 39 per cent in 2004 to 35 per cent in 2005, having been broadly stable in the previous four years. Women are less likely than men to exceed the benchmarks – 20 per cent did so in 2005. Perhaps changes in drinking habits are finally taking place in response to the increased availability of coffee shops and other cafés for social drinking. There are also signs of consumer preferences shifting as lower-alcohol beers increase their market share at the expense of premium lagers.
Meanwhile, those of us who have long since left teenage years (and binge drinking) behind will hope that none of the measures that could be introduced to restrain the abuse of alcohol would affect the – essentially immeasurable – pleasures associated with alcohol. The trouble is that some old people cannot be trusted. ‘Too old to booze’ was the headline of the story saying that pensioners in East Sussex were being sent letters warning them against heavy drinking after research showed that they were particularly prone to falling over after a tipple. There seems to be no easy solution.
The Death of Cinema
‘Coming soon, the end of a cinema near you?’ The Times
The arrival of digital videos and cameras, now typically available in mobile phones, and internet hosting sites means that film-making is no longer the preserve of a few Hollywood barons. The phenomenal success of YouTube, the site launched only in 2005, where people can watch and share original videos, exemplifies the way creative possibilities have opened up for the masses. But does it mean the death of the cinema?
We will certainly never be short of recorded moving images. In 2000 alone, it is estimated that 1½ billion hours of moving images were created, roughly 200,000 hours of film every hour. That represents a doubling compared to a decade before, but nothing compared to the forecasts for the years ahead. Within twenty years we could be creating 100 billion hours of moving images every year – equivalent to over 10 million hours of film for every hour of the day.1 Such a volume of material presents a range of difficulties, not least choosing what to watch and what to archive and save for the future.
Meanwhile, the increasing availability of DVDs, often free or at very low prices, and improvements in home entertainment are contributing to the fall in cinema attendances. This in turn is putting considerable financial pressure on the entertainment market and prompting much head-scratching about how to maintain revenue streams going forward. In the same way that digital technology has changed the production of film, for example in editing and the creation of special effects, it will surely have an impact too on distribution, projection and home delivery. This could be viewed as a positive development, not least because the lower costs allow new, independent directors to produce films. But where will we watch the new films?
The movie business has already been through – and survived – a number of transitions during its relatively short life. The early publicly shown movies – silent and black and white, probably part of travelling exhibits or acts in vaudeville programmes, often only a minute long, perhaps showing a single scene, authentic or staged, shown largely to working-class audiences – would be unrecognizable to today’s cinemagoers.
The First World War wrought many changes, notably dealing a devastating blow to the European film industry and giving the Americans – with the rise of Hollywood – the chance to earn the dominance in the mainstream industry, a dominance that it still has today despite many other countries and cultures having more or less thriving genres at various times. The hundred-year history of cinema shows the coming and going of many styles, techniques and fashions, and no shortage of people who say that things just aren’t what they used to be.
The economics too have changed. Cinema-going in the US reached its peak in the 1940s, when it was estimated that Americans spent nearly one-quarter of the money available for recreation on going to see films, compared to no more than one-fiftieth, 2 per cent, today. The widely accepted principal explanation for this decline was the mass arrival of televisions – between 1950 and 1955 the number of televisions in America increased eightfold to over 30 million. Although it is likely that increased urban sprawl (most cinemas were in urban areas) and anti-trust action (studios were no longer permitted to own theatre chains) also played a part.
But the long-term decline in the number of admissions stopped and rose for a couple of decades, due mainly to the arrival of the multiplex screens, which offer both more films and more viewing times for the same film. The number of screens in America increased by over 50 per cent to 37,000 during the 1990s, with a similar rise in the UK a little later, as multiplexes were rolled out. But for all the positive medium-term trends, the very recent past has seen declines in admissions again, reigniting concerns about the future. In the US, admissions peaked in 2002 at over 1.6 billion and have since declined to 1.4 billion – a 12 per cent fall in four years, returning admissions to the 1997 level. The fall in Britain over that period was slightly smaller – though 5 per cent in 2006 alone – and much smaller across Europe. Such declines are noteworthy but hardly amount to a death. In any case, attendances continue to rise in the Asia-Pacific region – up by 22 per cent in the last four years. The strength in the Asian market is encouraging for the business as it comprises around 60 per cent of global admissions.
The number of films released for a week or more during 2006 – 505 in Britain – is 40 per cent up on the 2001 figure and would seem to suggest that the industry is healthy. The increase was, however, in good part being driven by foreign-language films, with Hindi topping the list, designed often for minority communities. The top twenty films drive the business as they still account for roughly half of box-office takings. Even so, it is clear that a greater variety of films is available than was the case a decade or two ago.
Paradoxically, one reason to be optimistic about cinema attendances is that people in many countries do not go to the cinema very often, leaving plenty of room for improvement. Britons are on a par with the French and Spanish, visiting the cinema no more than three times a year on average. That is roughly twice as frequent as Italians and Germans but somewhat less than the Americans, who manage to notch up five trips a year. Plenty of youngsters go to the cinema frequently, but attendance drops off as we age – a trend that the industry could try to reverse.
The battle fought by cinemas in the last two decades has been against the VCR and DVD. While it survived the VCR, the latest decline could be linked to the increase in DVD household penetration. The number of American households owning a DVD player rose from 25 million in 2001 to 84 million in 2005, an increase from under one-quarter of TV-owning households to over three-quarters. Over the same three-year period, the average price of a DVD player halved, and the number of titles available has trebled. Cinema admissions per head in America fell from a recent peak of 5.7 a year in 2002 to 4.8 in 2006, with larger and better home TV screens, broadband internet options and more accessible illegal downloads and pirate DVDs putting pressure on numbers. On the other hand, research suggests that the households who own more sophisticated home entertainment technology tend to visit the movies more frequently than lower-tech households.
In the UK, the market for the rental of videos and DVDs has declined by over one-quarter from the peak in 2000, but that has been more than compensated for by an increase in the retail market. The total sales, of 229 million videos and DVDs in 2006, was more than double the sales seen in the late 1990s and reflected the falling price of DVDs as people have replaced the old-style video collections with the new media. The UK especially has also seen a dramatic rise in the occurrence of newspapers giving away discs – roughly 130 million units were given away in 2005 alone, with the number given away in the first quarter of 2006 being broadly the same number as retailers sold through traditional c
hannels.
The next big advance for the cinema-goers will be the arrival of digital cinema, which will not only reduce costs for distributors and help to control piracy, but, it is hoped, maintain the viewers’ experience gap with regard to the developing home cinema and high-definition TV market. This might well amount to the ‘death of film’, if not the cinema. Cinemas are now rolling out the new technology, and more than 20,000 d-cinema screens are expected worldwide by 2010. It sounds like an exciting enough prospect to keep drawing crowds, and, in any case, the cinema will still be a good place to take the children on a rainy day during the school holidays. Technically at least, such digitalization narrows the gap between television and film, opening the way for events such as concerts and sport to be shown in the cinema. As these events already draw much larger audiences than the most successful Hollywood film, the cinema, perhaps renamed and remodelled, looks likely to survive into the future.
Collectors’ Agony
‘This is a stick up’ Daily Mirror
The 2006 World Cup football competition, hosted by Germany, was bad enough for England supporters of all ages, with the over-hyped national team going out on penalties in the quarter finals. But the real agony was reserved for the children – and the parents of children – who decided to collect World Cup stickers.
One such set of stickers, which was available in dozens of countries, was produced by the Italian-based Panini Group, a magazine, sticker and new media group. The World Cup stickers included seventeen players from each of the thirty-two teams plus various others such as team photographs, badges and stadium pictures. In total, there were 598 stickers to collect and these were sold in packets of five, costing 35p each in the UK and an equivalent amount in other countries.
There is nothing new about the publication and collection of such stickers, with the origins of the hobby traced back over 100 years, when cigarette companies put collectable cards in their packets to boost sales. But the scale of such collections has increased – there were twenty-two more stickers in 2006 than were produced for the similar collection in the 2002 World Cup, making it more difficult and more expensive to complete the collection. Indeed, there has been inflation in the number of stickers in each set since they were first produced for the Mexico World Cup in 1970, when there were ‘just’ 271 stickers.
One newspaper headline, ‘The £100 World Cup penalty’, gave some indication of the problem of completing a set. Collecting the first few hundred stickers is relatively easy, but the laws of probability mean that the nearer collectors get to completing the album, the more difficult it is to find the last few.
The cost of buying 598 stickers at 7p each would be just under £42. But the issue of duplicates – the cards are sold in sealed packets of five – increases the cost considerably. For once, however, the headlines were not dramatic enough.
Fortunately some Irish academics worked out the likely cost of buying the full set of stickers. Kevin Hayes and Ailish Hannigan estimated that it would be necessary, on average, to buy 4,170 cards, that is 834 packs, at a cost of nearly £292 to complete the set. Their simulations show that an unlucky quarter of collectors will face the prospect of having to purchase more than 919 packets to complete their album, at an estimated cost of £322, but the luckiest quarter of collectors will purchase fewer than 724 packets, at the cost of £253. They estimated the median at 815 packets (costing £285) – that is, half the collectors will be expected to spend less than this amount to complete their album, and half will spend more.1
The National Consumer Council in the UK was reported as complaining about the cost of filling such albums, saying it was ‘far more than children can afford’ and that it was a ‘classic case of pester power’ as the producers of these products knew that parents would give in to their increasingly desperate children. It is only fair to say that it is not only children that collect such stickers. There were plenty of newspaper reports from all corners of the world of adults collecting and exchanging in an attempt to complete their album.
In the past, children would have swapped cards in the school playground, reducing the need to continue buying, in order to find the last elusive cards. Modern technology has short-circuited the playground, and cards and stickers for collections like this can now be traded over the internet. For those willing and able to go online, this goes some way to reducing the cost. It should also be said that Panini offered a facility for buying missing cards. But with the numbers of cards that can be bought being rationed, and there being a processing and postal delay before they arrived, the solution is unlikely to have been greeted enthusiastically by many of the collectors.
A much smaller collection of disks covering just the England squad was made available by Texaco, the petrol company, in the UK. A disk was given with every £10 of petrol bought, begging the question as to how many times it would be necessary to drive from England to Germany before collecting the full set.
4. Social Policy
We are always worried about money – pensions, debt and housing are the big-ticket items at the top of the list. Get these wrong, and your life can be ruined. Government economic and social policies, for example on immigration, can affect us too and so can being in the wrong place at the wrong time – if you happen to be involved in a traffic accident.
Golden Oldies’ Time Bomb
‘Should everyone be forced to save for their retirement?’ Independent
A generation ago the life pattern for most of the working masses in the developed world was simple – they worked until they were sixty-five, roughly pensionable age, and then they died. But increased life expectancy has changed all that, leaving people in the position where plenty have to plan for around two decades of life in retirement. This is a big change since the first universal pension in Britain was introduced nearly a century ago, in 1909. That applied only to anyone aged over seventy – a decade or more above life expectancy at the time – on a means-tested basis.
The phrase ‘Pensions time bomb’ has been coined to refer to the predicament we face. A growing proportion of elderly to care for, as explained in chapter 1, with a smaller proportion of workers paying taxes to fund that care means that government will be unable to afford generous pensions in the future. The reluctance, and in the case of the lower earners, the inability, to make private provision for pensions makes the situation worse. Company pension schemes are also under threat. The system in many countries is now complex, unwieldy and in crisis.
The institutional differences between countries coupled with decades of widely diverging savings behaviour make it very difficult to compare the state of the pensions provision in different countries. Many also suffer from a lack of decent statistics – and decent forecasts – setting out the state of play and the scale of any potential problem. Figures from state administrative systems and private savings schemes are often incomplete, pay-as-you-go systems have no statistics, and surveys are notoriously poor at collecting pension data as respondents rarely know the answers to questions.
Pension funds play a significant contribution in only a minority of developed countries. Four countries – the Netherlands, Iceland, Switzerland and the US – have pension fund assets that are greater in value than the annual output of their economies. Others, including Canada, Ireland, Australia and the UK, have assets of between one-half and one-third of national income. In terms of absolute value, American pension funds dwarf those in any other country, accounting for two-thirds of the global total. The UK’s assets are the second-largest, almost equal to the combined value of the third- and fourth-placed countries, Japan and the Netherlands. The dominant position of the Anglo-Saxon countries – Canada and Australia also have large pension funds – reflects the maturity of the private occupational pension plans started decades ago.
The slump in world equity markets between 2000 and 2003 caused the value of these assets to fall, but the rally in the markets since has seen the value in nominal terms increase substantially (to $18,000 billio
n in 2005 from $13,000 billion in 2001). This rise in the value of assets makes the pension provision look less worrying, yet despite this, across the industrialized nations as a whole the value of the funds in relation to national income is unchanged from what it was at the beginning of the decade.
Many countries, including Spain, France and Italy, have followed a different model, where public pensions play a dominant role in the old age retirement system. In these cases, pension fund assets amount to less than 10 per cent of national income. Many countries with small or immature private pension schemes have introduced policies to enhance them in the last decade. Where this has happened, for example in the Czech Republic, Hungary and Poland, asset values have grown quickly, although they are still small.
In addition to private pension fund and life insurance assets, several countries have accumulated assets in their so-called national pension reserve funds, funds set aside by otherwise pay-as-you-go systems in preparation for the rising financial costs resulting from the predicted ageing of populations (and the decline in the proportion of the population that is working that can finance the pensions through their taxes) in the next few decades.
Countries need to address these issues because the levels of public spending on social benefits are already high in many cases. Four European countries – Sweden, Denmark, France and Germany – spend an amount equivalent to over 30 per cent of their national income on social benefits and will find the costs increasingly hard to meet as the demographics deteriorate.
Panicology Page 11
