Changes In Consumers’ Entertainment Expenditures

Income Spent on Entertainment

Americans spend roughly 5% of their income on entertainment. Americans spend approximately $160/month on entertainment, spending mostly on TV and internet access subscriptions. According to the MPAA, the amount of hours individuals spend on media consumption is increasing in the filmed entertainment sector and is declining in other entertainment sectors.

Most Highly Consumed Entertainment Mediums – Current

As of 2007, the following entertainment mediums were the most highly consumed (based on time spent consuming the entertainment medium): cable & satellite TV, broadcast and satellite radio, broadcast TV, internet, newspapers, recorded music, consumer magazines, consumer books, and video games. The lesser-consumed entertainment products were: home video (DVD and VHS only), in-flight entertainment and mobile content, and movies (based on box office revenues). Based on consumer spending patterns, consumers spend more on TV than on any other entertainment medium. The following lists which entertainment mediums consumers spent the most on in 2007 (with the 2nd highest consumed product listed first): home video, books, internet, newspapers, magazines, recorded music, movies (box office), and other (which includes games, mobile content, broadcast, and satellite radio).

Most Highly Consumed Entertainment Mediums – 20 Years Ago

In relation to 20 years ago, the kinds of entertainment consumers consume have (for the most part) completely changed.  In 1988, Americans spent $126 billion on entertainment—roughly devoting 5% of their income to it. The forms of entertainment they spent their money on were: recreational lessons, home video game equipment, musical instruments, winter sports equipment, musical instruments, non-motorized boats, arcade games, fees and admissions (to movies and theme parks, etc…), sporting events, radios, boat docking space, photography equipment, supplies and medicine for pets, VCRs, sound equipment rentals, household sound systems, tape players, tape recorders, color TV consoles, recreational vehicles and playground sets.

Current vs. Past Entertainment Spending Differences

A huge difference between current and past entertainment spending is that VCRs, tape players, and tape recorders have become obsolete and rather than purchasing color TVs, most people are moving towards flat screen, digital TV sets (because they already have a color TV). People, instead of purchasing radios, are now purchasing iPods and listening to the radio in their cars. Another major difference between entertainment consumption 20 years ago, versus today, is that more time and money was spent on physical or educational activities. In all of the studies and reports found about current entertainment consumption, recreational lessons, musical instruments, winter sports equipment, boats, photography equipment, pet care supplies, and playground sets weren’t even mentioned as sources of entertainment spending. Although most are accounted for in “Other Forms of Entertainment,” the annual amount spent on them in 2007 was so insignificant—it wasn’t even worth mentioning as separate entertainment forms and expenditures.