51 Why Hollywood Rules the World, and Whether We Should Care

Tyler Cowen

Cinema is one of the hard cases for globalization. When we look at world music, the visual arts, or literature, it is readily apparent how trade has brought a more diverse menu of choice and helped many regions develop cultural identities. In each of these cultural sectors, the market has room for many producers, in large part because the costs of production are relatively low.

But what about film? In no other cultural area is America's export prowess so strong. Movies are very expensive to make, and in a given year there are far fewer films released than books, CDs, or paintings. These conditions appear to favor dominant producers at the expense of niche markets. So if cross-cultural exchange will look bad anywhere, it is in the realm of cinema.

Moviemaking also is prone to geographic clustering. Many cultural innovations and breakthroughs are spatially concentrated. If a good Italian Renaissance painter was not born in Florence, Venice, or Rome, he usually found it worthwhile to move to one of those locales. An analogous claim is true for Hollywood, which attracts cinematic talent from around the world, strengthening its market position.

The degree of clustering has reached a sufficient extreme, and Hollywood movies have become so publicly visible, as to occasion charges of American cultural imperialism. European movies, in particular, have failed to penetrate global markets and also have lost ground ...

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