We don’t know the world

A few years ago I saw a fantastic talk from Hans Rosling about the world and statistics. Okay, I probably lost a few people by implying statistics are fantastic, and now I’ll lose some more by saying statistics ARE fantastic. Unfortunately, Hans is no longer with us, but his son and daughter-in-law – Ola and Anna – are continuing his work with Gap Minder.

Recently they released the results of their 2017 survey of world knowledge. After looking at the results they decided to call it the Misconception Study.* You’ll see why.

That’s right, less than chance. People really don’t know that much about the world.

gms_2017inpage-1024x523

Do you think you could do better? Well, find out! Take the 2018 quiz here. Of course, this is the part where I say that I passed the test. Humble-brag. But in fairness, as I’ve already mentioned, I’ve been following Gap Minder and I like statistics.

Could you pass the test?

*They probably called it that prior, but I’m making a point here, dammit!

Can you name a book?

creative-bookshelf-18__700

Sounds like a simple challenge, right? Name a book, any book at all.

In the long tradition of asking Americans general knowledge questions on the street and filming their glorious ignorance, I present this video from Jimmy Kimmel.

Before we all laugh and point at the Americans and insult their intelligence, let’s remember that you could do this just about anywhere. Although, Americans do make this stuff easy at times. I’ve previously discussed the reading figures for the US, UK, and Australia. I’m sure those numbers are at least in the same ballpark as other countries, if not outright representative.

Wait, why guess when I can actually use the wonders of the greatest information resource in human history to look that up? Why have an unfounded opinion that I then rant about in indignant outrage, arrogantly assuming I’m right and belittling anyone who does bother to look up the data? To the research!

Let’s start with the data that the above video was citing from Pew Research.

ft_18-03-22_nonbookreaders_whohasnt
Source

As we can see, the 24% figure is showing that older, poorer, less educated, men (just), and Hispanics read less in the USA. This isn’t a new conclusion, as data from Pew in 2016 shows. The conclusion around the number who don’t read is also similar to the 2016 results of 26% not having read a book in the last 12 months. I’m not sure you can interpret much change over time in the number of people reading, but numbers might be slowly decreasing (although, look at the uptick in audiobooks as that format has come down in price).

ft_18-03-07_bookreading_printbooks
Source

Now we can look at how the USA sits in terms of reading. I’ve previously discussed how Aussies spend roughly 23 minutes per day reading (ABS figures), or an hour a day if you believe the Australian Arts Council report (I suggested there was possible survey bias in that figure). Below you can see that the NOP World Culture Score puts Australia at 6 hours 18 minutes – which I think makes this an “ALL-YOU bench-press” set of numbers.

chartoftheday_6125_which_countries_read_the_most_n
Source: Statista

This chart suggests that the USA is probably typical for English speaking countries, but that many other countries read far more on a weekly basis in terms of hours. Unless reading is code for something else in non-English speaking countries. Maybe they thought they were being asked about how many hours they spent having sex per week.

If we then look at the countries and how frequently they read books you can see in the chart below that they were afraid to include the bars for “didn’t read a book”. The high end has only 14% of Chinese people not reading a book, whilst the low end has the Dutch at 43% not reading (USA comes in at 29%, UK 28%, Australia 38% – I demand a recount!!).*

Screen Shot 2018-05-25 at 7.50.23 pm
Source: Statista

How about the number of books people read, or at least what they claim once they round up?

number_of_books_read_in_the_last_12_months2c_2011
Source: Eurostat
table-2
Source
Screen Shot 2017-10-08 at 6.24.23 PM
Source

What this all shows is that there are plenty of countries where you could ask ten people on the street to name a book and have one or two of them fail. You could ask those ten people what book were they reading today and only three of them could. Isn’t that sad? I reckon people would really enjoy reading if they made time for it. I’ve commented before on why I think people don’t read, suggesting that they don’t because they get told to read literature when they actually enjoy thrillers, sci-fi, and romance.

Maybe it is time to change that before someone sticks a camera and microphone in our faces.

*Be careful with my assumption here. Depending on how the question was asked and any other unreported categories, I may be very wrong in assuming the unreported numbers are non-readers.

Down with Reading?

An interesting table of statistics – yes I am assuming statistics are interesting, why yes, I am a huge nerd – crossed my feed today. The table, presented below, shows the household expenditure breakdowns over time (1990-2009). The highlighted lines show the amounts spent on entertainment and reading.

US Bureau of Labor Statistics (with labour spelt incorrectly)
US Bureau of Labor Statistics (with labour spelt incorrectly)

For those of you who are blind or prefer reading my words rather than a table of numbers, the statistics show that since 1990 there has been a pretty steady increase in household expenditure on entertainment, but the amount spent on reading has been in steady decline. Clearly it is time to panic. Movies, TV and gaming have won. Time to give up reading and writing. No future in it.

Well, that would be the conclusion if you don’t go and look for the source data.

Now I am rather lazy, so I haven’t bothered to look up every year of data and tried to recreate the table. But what I have done is looked up the figures from a few of the years not included in the table: 2010, 20112012 and 2013. The spend on reading from those years is $100, $115, $109 (no 2013 data as yet) and entertainment spend of $2,504, $2,572, $2,605 and $2,482. Seems like that trend stopped, or something.

Actually, the trend has more to do with the household demographics and income than any change in book buying. Whilst in the early 2000’s there was a drop in reading for entertainment from ~0.4% of household expenditure to ~0.2%, this has been consistent since. So readers are still buying and reading books at roughly the same proportion as always.

And who are the readers? Well, from the demographics breakdown the readers tend to be middle-aged or older, higher income, educated households, or households without kids. Apparently having kids stops you reading, can’t think why. And clearly older and more affluent people are the ones who can afford the hardcover prices, or see the value in them, or just like having something on the bookshelf surrounding their money pile – rich people have money piles in their houses, right?

To me this doesn’t say reading is a dying industry, rather that there are groups being missed by the current industry. Of course I’m biased and probably daydreaming about a magical place where books hunt down DVDs for sport. The younger people tend to have less entertainment expenditure, with the average consumer spending 5% of their income on entertainment, whilst under 25s spend between 4 and 5%. Their book buying appears to have declined and is lower than the average consumer, at 0.14% (2012). This makes them a missed market (or possibly buying cheaper e-books). The other groups spending less on books are the less educated and lower income people, and again, not just in total expenditure but in the proportion of household expenditure.

Clearly these three groups could be reading just as much but instead of buying books they are borrowing them from friends or libraries, or they might be buying cheaper books. But something tells me this isn’t the case, what with the kids these days with their hippity hop music and haircuts. To my mind the fear that the market for books is shrinking, as suggested by the above table, is not borne out by the more recent data. We see more competition for entertainment dollars yet books don’t change that much ($150 to $110 over 22 years is 3 paperbacks in the US) suggesting that the problem is in who is reading. If reading is going to be only for richer, older and more educated people then we have a problem, especially if we aren’t creating the next generation of readers.

The decline of cinema

theater management

There is only really one thing I miss about living in the city and that is going to the cinema. Of course, I’d miss that even more if there were movies worth shelling out this month’s mortgage repayments to see. The idea of paying big bucks to sit in a seat that has probably been used for sex by strangers, eating snacks that have a 2000% markup, after forgetting your earplugs and going partially deaf, which is a blessing after the pre-movie ads, is just not that appealing. Now Australian cinemas have decided they aren’t charging movie goers enough money and have decided to blame an easy target to justify their cash grab.

Cinema executives have blamed piracy on the recent price rises of ticket prices in Australia. Because of course it is piracy that is to blame, and not the marginalising of the customer base with exorbitant pricing regimes. Nor could it possibly be that people have more alternate entertainment options, including waiting a few months to watch the latest “blockbuster” in their own home cinema. Nor could it be the rubbish that so many movie studios are turning out.

Let’s dissect this nonsense like the original reports in the media should have done. There are many factors at play in the decline of cinema. The first real problem is that there hasn’t really been a change in the proportion of the population that go to the cinema in 40 years, but the number of times per year they go has been steadily declining since the 90’s.

ATTENDANCE
(% BEEN TO THE CINEMA IN THE LAST 12 MONTHS)

FREQUENCY
(AVERAGE NO. VISITS PER YEAR)

audiences_cin_attend_01

audiences_cin_attend_02

So rather than keeping audiences entertained regularly, audiences are clearly becoming more occasional customers. Underneath that general trend are some interesting changes in the demographics of cinema attendance. It is no secret that Hollywood movies are made for teenagers. Teens are a huge chunk of the cinema audience. But, the biggest change in the repeat attendees is in the teen market, which has been in steady general decline since the 70’s. Which part of the market is going to be most impacted by price rises? Go on: guess!

ATTENDANCE RATE
(% BEEN TO THE CINEMA IN THE LAST 12 MONTHS)

FREQUENCY
(AVERAGE NO. VISITS PER YEAR)

audiences_cinxage_rate

audiences_cinxage_freq

Another way to look at this is in the proportion of the population going to cinemas in the age demographics. Below you can see the 14-17 and 18-24 age groups are overrepresented as cinema goers, this starts to even out in the 25-34 group (also known as the settling down and going out less demographic), is at parity in the 35-49 group (also known as the parenthood has stolen my social life demographic), and people over 50 clearly don’t like all the loud noises.

AGE PROFILE OF CINEMA-GOERS COMPARED TO THE AUSTRALIAN POPULATION
OVER THE AGE OF 14, 2012

audiences_cin_genderprofile

So while the proportion of the population that have been going to the cinema each year has been pretty steady across the entire population, it is the number of times people go that is making the difference, especially in that much coveted teen “I want to see explosions and car chases” market. (Interesting aside: when you look at the age group breakdowns you do see that the over 25 audience since the 70’s have generally increased in their likelihood to attend the cinema, but this has been static for most demographic groups since the mid 90’s.) To put some hard numbers on that difference in the number of times a teen goes to the cinema each year, in 1974 the 14-24 demographic averaged 16.4 visits to the cinema, in 2012 that had dropped to 6.6 visits.

Obviously there are a lot of changes in the marketplace that have occurred over this time. TV has expanded, cable TV is a thing now, home rental or ownership of movies is a thing (VHS succeeded by DVD, now being superseded by Streaming, which will probably be superseded by actors coming to your house to perform on demand), computer games have grown in leaps and bounds, the internet, all vying for our attention and wallets. Just look at the change in households with various alternatives to cinema (NB: the game consoles data doesn’t tell the full gaming story, see this for more about that market):

Graph: Proportion of households with computer, Internet, mobile phone, games console and DVD player. The following table provides the data.

I alluded to this above, but one big change has been the home cinema. Some people will remember a time when some cinema screens were actually not much bigger than the ones installed in many homes now. Sound systems have improved greatly over the crappy little speaker that was the drive-in experience. Now we have high quality TVs and projection units that rival anything you can get in a cinema complex, and these come with a pause function, easy access to food that doesn’t kill your wallet nor beat your heart with belly flab, and sound settings lower than jackhammer. Then you have all the other possible entertainment options available, suddenly the list of movies (not) to see just isn’t as appealing.

The one thing cinemas still have going for them is windowing. For the first few months after opening, there is no other (legal) way to watch the film, you have to watch it in the cinema or wait for the DVD release. Although it seems clear people are more willing to wait, let the dust settle after opening weekend, and figure out what is worth watching, whether that be at the cinema, on DVD, when it makes it to TV, or at all. And now I’m going to contradict myself and say that piracy proves people aren’t willing to wait for those other options, preferring simultaneous releases. Both arguments still point out that people just aren’t as interested in paying big(ger) bucks to see movies in the cinema. Of course movie studios and distributors don’t like that idea, since windowing is great for their bottom line, especially opening weekend.

Now the reason for the price rise could be something to do with this chart, showing that 21% of the market is in the highest income households. Cinemas are obviously betting that their price elasticity is low and will take the price increase in their stride. What this ignores is the age demographic data above, which shows a sizeable chunk of the audience may be from affluent households, but that doesn’t mean their teenage bank account is bulging with lots of cash.

Equivalised gross household income quintiles No. cinema-goers (‘000) Share of cinema-goers (%) Attendance rate (%)
Lowest quintile 1,010.6 9.7% 47.2%
Second quintile 1,305.6 12.5% 50.8%
Third quintile 1,879.1 18.0% 66.6%
Fourth quintile 2,106.4 20.2% 75.3%
Highest quintile 2,199.2 21.1% 80.0%
Unknown 1,930.5 18.5% 65.8%
Total 10,431.4 100% 65.2%

So we see that cinema audiences are becoming more occasional consumers, the trip to the movies is a special event, not a regular event. Teens are a big chunk of the cinema market and they aren’t the repeat customers they used to be. This is what happens when you price customers out of the market, you bite the hand that feeds. You also have them turn to other entertainment mediums. Blaming piracy for what is demonstrably a long term trend is a pretty big reach. I’d also argue that piracy is a reaction to consumer demand for lower pricing and simultaneous releasing, so that audiences can consume the movies in the way they want to, not the way they are being forced to, at a price that is commensurate with the utility received (e.g. people pay as much or more for a DVD – less if you consider it a couple or family purchase). If cinemas have anyone to blame it is themselves and their suppliers (distributors and studios). Using piracy to justify a price increase is clearly unfounded.

Of course, what needs to be mentioned is that films are essentially a loss leader for cinemas so that they can make money selling snacks and beverages. This ticket price increase is probably driven through the supply chain rather than by the cinemas themselves. But this also shows how cinemas have to adapt in order to survive. Going out to a movie is an experience. People are more willing to pay for experiences rather than stuff (DVDs). So if cinemas can get serious about screening experience at a fair price, they might get the audience back, or at least stop the decline.

Sources: http://www.screenaustralia.gov.au/research/statistics/audiences.aspx

http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4901.0Main+Features1Apr%202009?OpenDocument

http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6530.0Main+Features12003-04%20(Reissue)?OpenDocument

Can’t we all just get along: DTB vs E-book

Print vs ebook infographic
The big take home from this infographic is that readers are more interested in reading, not on the format it comes in. I also found it interesting that people read slower on an e-reader (which I’d guess is because the screen is smaller and requires more ‘page turns’ which breaks reading flow) yet those using e-readers read an average of 9 more books per year (24 vs 15).

In summary: reading is good, go and enjoy a good book.