5、Television

　　Grim reality

　　Nov 4th 2004 From The Economist print edition

　　America's appetite for reality television is flagging

　　“THE Rebel Billionaire: Branson's Quest for the Best” will make its debut on America's Fox network next week, featuring a British tycoon, Sir Richard Branson, trying to make as successful a reality-TV show as an American mogul, Donald Trump, star of “The Apprentice”. A contestant will get dumped in each episode; the winner will get $1m and a job. The timing is not auspicious for Sir Richard. Reality TV has faltered in the American ratings recently, with viewing down for “The Benefactor”, “The Bachelor” and even “The Apprentice”. New shows, such as “The Next Great Champ” and “The Last Comic Standing”, have done so badly that they have been relegated to cable networks.

　　Too many shows of obviously inferior quality have pricked reality's bubble, says David Poltrack, head of research and planning at the CBS network. According to CBS's audience research, people are especially fed up with the glut of copycat programmes that schedulers have rushed on to the air following the genre's spectacular success over the past few years. That will make it hard for any new reality show—good or bad—to get a strong start, he says. It also bodes ill for Fox's forthcoming dedicated reality-TV cable channel—especially as there are two of them already.

　　So is the genre over? Network executives and advertisers agree that the strongest and most original shows will survive—CBS's “Survivor”, for instance, remains popular—although they will no longer be able to count on any me-too programme succeeding. Reality TV is still far cheaper to make than drama. Advertisers like its younger audiences.

　　There is little sign of fatigue outside America. Familiar formats are making their way across Europe. In Britain, ratings are high for ITV's “I'm a Celebrity, Get Me Out of Here”, Channel 4's “Big Brother” and Channel 5's “The Farm”, in which a celebrity female contestant recently shocked viewers by manually extracting semen from a pig. British telly may in future make fewer reality shows, but (chiefly) only if the publicly funded BBC decides to emphasise “public-service” fare in a bid to persuade the government to renew its subsidy.

　　Reality TV's pause in America is allowing scripted drama to bounce back, to the relief of professional actors and scribes who complain of being under-employed. The hit of America's autumn season is “Desperate Housewives”, a highly-sexed fictional version of suburban life. Yet reality's techniques are influencing even scripted programmes, says Alan Boyd of Fremantle Media. ABC's new drama, “Lost”, for instance, about passengers surviving a plane crash, looks rather like “Survivor”. “The Office”, a British comedy that has received critical acclaim in America too, looks much like reality TV with a script.

　　6、Smoking

　　Stubbing it out Nov 11th 2004 From The Economist print edition

　　What effect will Scotland's smoking ban have?

　　IT WAS a radical, sweeping and entirely expected move. On November 10th the Scottish cabinet voted to follow Ireland, New York and Norway in banning smoking in public places, including pubs, restaurants and even private members' clubs.

　　The Scottish Executive argues that Scotland is one of the unhealthiest nations in Europe, and smoking is partly to blame. Some 31% of Scots smoke, compared with 26% of Britons. Lung cancer rates are 49% higher in Scotland than in the rest of the country. Jack McConnell, Scotland's first minister, says that cigarette sales in New York fell by 13% after a ban was introduced in 2003, and by 16% in Ireland, which brought one in earlier this year.

　　Whether the public is as keen as its leaders is less clear. The Scottish Executive insists that there is support for a total ban, but a leaked internal poll indicated that only half the population was in favour. A different poll, conducted by Populus for the pro-smoking group Forest, found that 73% opposed an outright ban; most favoured a compromise of some sort.

　　Nor is the likely impact on Scottish business any clearer. The Licensed Traders' Association, which represents Scottish pubs, predicted 30,000 jobs would go. Nonsense, said the government.

　　Evidence from overseas sheds little light. After the ban in Ireland, the Irish Brewers' Association reported a 6% decline in beer sales in pubs. But the Irish are among the heaviest drinkers in Europe, and sales fell by a similar amount in 2003, before the ban. So the decline may be part of a long-term trend. The Vintners' Association, which represents Dublin pubs, says it has clearer statistics: it reckons that trade is down about 16%, and that about 2,000 jobs have gone.

　　Anti-smoking groups prefer to point to New York, where a government study reported that bars and restaurants had hired 2,800 extra staff to cope with increased demand in the wake of the ban there. But the New York Nightlife Association, a trade body, points out that the study covered workers in fast-food restaurants that had never allowed smoking on their premises, even before the ban. It reckons that employment has fallen by 10%—although the number of people applying for a licence to run a bar has stayed the same.

　　Smokers will now turn their attention to England, which has been toying with the idea of a ban for some time. Ministers there are thought to be reluctant to ban smoking outright, especially with a general election looming, but new health proposals dealing with the subject are due before the end of the year. No doubt the English ministers will be studying the Scottish debate closely.

　　7、Microfinance

　　Small sums, big issue Nov 18th 2004 | NEW YORK From The Economist print edition

　　The United Nations turns its attention to finance for the poor

　　AMONG the more benign activities of the United Nations is the dedication of various years to specific causes. Mountains, deserts, rice and dialogue have all had their 365 days of fame. There is little evidence that the attention has done mountains, deserts, rice and dialogue any harm—but also not much to suggest that they have benefited either.

　　In the next 12 months the spotlight falls on microfinance, the business of lending small amounts of money to the poor, taking deposits from them, transmitting money on their behalf and insuring them. With luck, the UN's effort will turn out to be substantial rather than symbolic. It certainly kicked off in style, with a big party at the UN's New York headquarters that demonstrated how fashionable the subject has become. Among the 700 in attendance were top bankers, politicians and a film star or two. The UN also announced the appointment of an advisory panel to consider what may be impeding the growth and effectiveness of microfinance. Its members include businessmen and financiers (as well as the editor of The Economist's business section).

　　The success of the year depends to a great extent on whether the UN can harness its member states and financial institutions to establish some basic facts. Remarkably little is known about how finance operates outside wealthy countries. No good data exist on how many people have access to financial institutions, the breadth and penetration of banks in poor countries, the real cost of a loan and the time it takes to get one, the ease of making a deposit and so forth.

　　Microfinance itself is something of a mystery. There are no authoritative figures on the number and performance of microlending institutions. There is not even convincing information, beyond lots of anecdotes illustrated by photographs of women in rural villages, about whether microfinance makes any significant contribution to economic growth or is merely another philanthropic fad.

　　In principle, loans to the poor should bring great benefits. Because the poor have less capital and often can borrow only with great difficulty, if at all, they ought to use extra capital more productively than the rich. Indeed, this might explain why even in the poorest places there is some form of money lending despite staggeringly high interest rates: 1,000% a year is not uncommon. However, such rates inevitably take a toll on enterprise and economic growth. The year of microcredit will have proven to be of great worth if it can first document the impediments to more efficient forms of financial intermediation and then begin to clear them away.

　　For example, the UN would do well to address the common complaint that banks ignore the poor out of class bias. If they do, the UN's interest may hasten change: some financial institutions are already making efforts to work with the poor, either directly or by providing wholesale services to smaller financial institutions. And many working in microfinance complain that their small size and lack of traditional assets make it hard to attract capital either on their own account or through syndicated loans. A year hence, perhaps some of this will have changed.

　　8、The dollar

　　Further to fall

　　Dec 29th 2004 From The Economist print edition

　　A new year is likely to bring a new low for the dollar

　　THE dollar ended the year as it began: heading downhill. It hit a new low against the euro, below $1.36, on December 28th. Against the yen, it was steadier: ¥103, slightly stronger than in late November. The yen has risen by less than the euro because, although the Bank of Japan has not intervened in the foreign-exchange markets since March, the bank looks more likely to act than the European Central Bank. Japan's finance minister, Sadakazu Tanigaki, gave warning this week that his country's authorities would monitor foreign-exchange markets over the New Year holiday. In contrast, Gerrit Zalm, the Dutch finance minister, suggested that the euro's rise so far was acceptable.

　　Since early 2002 the dollar has lost 37% against the euro and 24% against the yen. But it has shed only 16% against the Federal Reserve's broad basket of currencies, because many Asian currencies are pegged or closely tied to the greenback.

　　The cause of the dollar's decline is hardly a mystery: private investors are less eager to finance America's huge current-account deficit. The deficit widened slightly in the third quarter of 2004, to a record $165 billion, or 5.6% of GDP. If the deficit remains so big, America's foreign debt burden and hence its debt-service payments will increase sharply.

　　So far, America's mounting foreign liabilities have not harmed its economy because the rise in its debt in recent years has been offset by lower interest rates. As a result, America still enjoys a net inflow of foreign investment income despite being the world's biggest debtor. But, as interest rates rise, refinancing America's debt will become more costly. Goldman Sachs forecasts that net foreign investment income is likely to shift to a sizeable deficit during 2005, growing thereafter. The investment bank estimates that, if America's current-account deficit remains steady as a share of GDP and interest rates average 5% in future, net foreign debt-service payments will reach 4% of GDP by 2020—a significant drag on American living standards.

　　By most measures the dollar is already undervalued, but experience suggests that it will need to fall further still to cut the deficit to a sustainable level, say 2-3% of GDP. Capital Economics, a London research firm, forecasts that the dollar will fall to $1.40 against the euro and to ¥90 by the end of 2005. But it expects the dollar to recover against the British pound to $1.82 from $1.93 today, as British interest rates are cut in the wake of falling house prices.