Soft power: the media industries in Britain since 1870

This paper discusses the emergence and growth of various media industries in Britain. It shows how a rise in real wages and leisure time, rapid urbanisation and the development of fast urban transport networks, and a rapid growth of the market’s size let to a sharp rise in the demand for media and entertainment products and services, which was met by ever-new technologies coming from constantly emerging new industries, such as recorded music, film, radio, television, cable, videogames, internet, and social media. The paper argued these industries contributed to a sharp productivity rise by industrialising traditional media and entertainment, and to a sharp welfare growth as consumers valued them so highly that they were willing to incur ever-higher opportunity costs to consume them. It also discusses how four factors quality races, marginal revenues equalling marginal profits, the superstar effect and agglomeration benefits shaped the evolution of individual industries, and it assesses the success or failure of British industrial policy towards media industries. The paper observes media’s impact on the aggregate economy through opportunity costs, expectations and aspirations, the functioning of the market, education, and, finally, through shaping the means of institutional change. In addition, the paper makes new decennial benchmark estimates for British consumer expenditure on books between 1870 and 1900, on recorded music between 1900 and 1930 and on cinema between 1910 and 1930, for which previously no estimates were available