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Entertainment and the Economy

Updated on December 12, 2017
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Stephen Bush is a consulting and career training expert. He is the CEO and Founder of AEX Commercial Financing Group.

Entertainment and the Economy
Entertainment and the Economy

Is Entertainment Good for the Economy?

Since the past decade has been full of challenging economic times, there has been no shortage of ideas from politicians and others about ways to get the economy rolling again. What role does entertainment play in this?

Has entertainment spending increased or decreased during the past ten years? Is entertainment "all good" when it comes to economic impact?

As you will see, entertainment is full of positive economic impacts.

I would rather entertain and hope that people learned something than educate people and hope they were entertained.

— Walt Disney

Many of us do not fully understand the entertainment economy.

The Multiplier Effect of the Entertainment Industry

Certainly we would all agree that entertainment has global impact. A Michael Wolf book — "The Entertainment Economy" — takes that perspective several steps further and provides a conclusion that all businesses will have to become entertaining if they are to survive. I believe that any book that makes a persuasive case about how individuals and small business owners will improve their chances of survival is worth reading.

While not all entertainment events will receive positive critical acclaim, a supportable case can be made that "It's all good" in terms of what entertainment means for the economy. The "entertainment industry" is a diverse collection of individuals, small businesses, not-for-profit organizations and large corporations. When economists talk about the economic impact of various activities and industries, it is common to hear them talk about the "multiplier effect." This is an attempt to measure how money initially spent on things like payroll for performers in a Broadway play ends up having a much bigger impact on the local, regional and national economy than just the initial expenditures for producing the play. In comparison to other industries, entertainment activities have one of the biggest ripple effects throughout the entire economy. Unfortunately this means that while increases in spending for entertainment are felt in a positive way throughout the economy, decreases in entertainment expenditures can have a noticeable negative impact.

Examples of Entertainment Spending
Music
Books
Film and video
Video games
Sporting events
Movies
Television
Radio
Theater
Performing arts
Online streaming
Entertainment supplies and equipment
12 Examples of the Entertainment Economy

We aren't in an information age, we are in an entertainment age.

— Tony Robbins

A Poll: Is Entertainment Good for the Economy?

Is entertainment good for the economy?

See results

The Economy Breaks into Song? - An Entertaining Explanation

The economy is definitely one of those subjects that deserves to be explained in whatever way each individual can best understand it. Here is the video treatment.

Politics is the entertainment branch of industry.

— Frank Zappa

Entertainment Is a Business

Yes, entertainment is a business — and "Entertainment Industry Economics" does an excellent job of evaluating the financial economics that guide the multiple impacts entertainment has on our economy.

The Wide World of Business — Good News or Bad News?

The Wide World of Entertainment includes a number of highly specialized individuals whose primary passion is frequently at odds with the Wide World of Business. As two examples, musicians and writers will routinely engage in fierce debates with the accountants and executives about the proper priorities of quality versus profits. It seems like the financial wizards never get the memos about how artistic inspiration is rarely in harmony with rigid budgets and schedules.

Will this debate ever end? It certainly seems unlikely with the traditional methods of business taking on a seemingly bigger role. The vast fortune to be reaped from entertainment suggests on the one hand that there is plenty of everything to go around and that there should be flexibility and allowances for artistic freedom. On the other hand, "freedom" and "collaboration" are not in many of the operational business dictionaries I have seen put into actual practice through the years.

The Wide World of Business is routinely operating on a different wave length. Peter Drucker spoke often about the critical problems created by a lack of proper communication. He was looking squarely in the face of the business world at large when he made this observation. He once said that "The most important thing in communication is to hear what isn't being said." Unfortunately, very few business executives and accountants possess this vital communication skill.

We live in an age where people will watch epic entertainment on their phones.

— Will Arnett
Show Business and the Economy
Show Business and the Economy

Economic Impact Is in the Eye of the Beholder

Our current divisive political climate seems to invite debate on virtually everything and rejection of most attempts at consensus. As much as any segment of the economy, entertainers and entertainment have contributed to a helping and learning environment while also adding to a positive economic impact.

Television is a medium of entertainment which permits millions of people to listen to the same joke at the same time, and yet remain lonesome.

— T.S. Eliot

The Changing Entertainment Industry

When we talk about entertainment industry changes, just think about one striking example — television. The evolution illustrated by TV and video viewing since 1976 is truly remarkable. Television viewers have witnessed the replacement of Betamax and VHS videocassettes with DVDs — and now DVDs are being pushed out by a newer contender: online streaming. At the same time, cable TV has expanded viewing habits from three networks to hundreds of channels.

Picture quality on televisions and other viewing devices seems to be on a “To Infinity and Beyond” journey — with contemporary 4K resolution (also known as Ultra HD with a horizontal resolution of 4000 pixels). In comparison, the recent past (10 years ago or so) offered SD (standard definition) resolution with 720 pixels. Dramatic advancements from the earliest color television quality were facilitated by changes from analog to digital transmissions that used video compression technology. Additionally, television viewing became a mobile activity for viewers with tablets and mobile phones.

The underlying changes in television viewing have literally changed how people plan and execute their daily routines. The time-shifting technology enabled first by VCR (videocassette recorder) recording of shows and then by the DVR (digital video recorder) and online streaming meant that network shows no longer needed to be watched when they were broadcast. Along with that new freedom for viewers, television traditions such as “The Evening News” (with Walter Cronkite and other icons) and “The Family Viewing Hour” at 8 pm began to gradually disappear — along with reduced reading of traditional newspapers.

But change is hardly a new concept. As noted by the pre-Socratic philosopher, Heraclitus — “There is nothing permanent except change.”

I never called my work an 'art'. It's part of show business, the business of building entertainment.

— Walt Disney
The Digital Entertainment Economy
The Digital Entertainment Economy

© 2012 Stephen Bush

And now, your thoughts on the subject...

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      Muhammad Fahad 2 months ago

      Need a complete detail how single variables effect Economy. and i need paper 0n it can any 1 ? i ll be thankful

    • profile image

      anonymous 5 years ago

      I did enjoy my visit. We are a culture built on entertainment. Look at the goliath that is the NFL. When all else fails, there's always entetainment of some sort at a reasonable price.

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      anonymous 5 years ago

      I see I was here before and cast my vote on this lens with a like, but I must not have had anything to say that day. Now I do. lol

      What would most people do without a TV for entertainment? Personally I do enjoy a good laugh at times, America's Funniest Videos is my favorite, then MythBusters, but I hardly watch them. Too busy working on Squidoo, which has plenty of entertainment value and its free. :)

    • TransplantedSoul profile image

      TransplantedSoul 5 years ago

      Entertainment is good, but the earnings of celebrities is disproportionate to thie value. SOmething is seriously unbalanced here.

    • siobhanryan profile image

      siobhanryan 5 years ago

      I believe is the backbone of economy--in good time or bad time people need to escape from reality