While some argue that new technology is leading to the decentralization of production and consumption of creative products, we find that the entertainment industry is concentrated in New York and Los Angeles, with one or two other locations specializing in particular segments, such as Nashville in music and Las Vegas in dance. At the same time, we find some dispersal of activity to smaller centers. Thus we conclude that concentration is increasing in the largest city-regions and dispersal is growing in other centers.

Authors
Richard Florida, Martin Prosperity Institute, Rotman School of Management
Charlotta Mellander, The Prosperity Institute of Scandinavia, Jönköping International Business School
Kevin Stolarick, Martin Prosperity Institute, Rotman School of Management

Subjects: Entertainment, Agglomeration, Economies of Scale, Economies of Scope

Related Projects: Creative Industries & the Creative Economy, Mega-regions, Music & the Entertainment Economy



Abstract
It is argued that the introduction of new technology is leading toward the decentralization of the production and consumption of creative products and industries. But creative industries and workers may benefit from being around large markets, access to shared labor, network interactions and economies of scale as well as scope. We hypothesize that the combined effects of scale and scope economies shape the significant geographic concentration of the entertainment industry. We test for this using data for 297 U.S. metropolitan areas from 1970-2000 for the entertainment industry overall and its key sub-segments. The findings indicate that the entertainment industry is concentrated in New York and Los Angeles which significantly outperform other large regions. We further note the rise of one or two highly specialized locations in individual segments of the entertainment industry such as Nashville in music or Las Vegas for dancers. We also find some dispersal of entertainment activity to smaller centers. We conclude that the entertainment industry is characterized by a bifurcated spatial structure – with concentration driven by the conjoined effects of scale and scope economies growing at the very top (among the very largest city-regions) and dispersal growing at the bottom.