Working Papers No. 102/07 The Evolution of Entertainment Consumption and the Emergence of Cinema, 1890-1940

This paper investigates the role of consumption in the emergence of the motion picture industry in Britain France and the US. A time-lag of at least twelve years between the invention of cinema and the film industry’s take-off suggests that the latter was not mainly technology-driven. In all three countries, demand for spectator entertainment grew at a phenomenal rate, far more still in quantity than in expenditure terms. In 1890 ‘amusements and vacation ’ was a luxury service in all three countries. Later, US consumers consumed consistently more cinema than live, compared to Europe. More disaggregated data for the 1930s reveal that in Europe, cinema was an inferior good, in the US it was a luxury, and that in Europe, live entertainment was just above a normal good, while in the US it was a strong luxury. Comparative analysis of consumption differences suggests that one-thirds of the US/UK difference and nearly all of the UK/France difference can be explained by differences in relative price (‘technology’), and all of the US/France difference by differences i