Gerben Bakker’s Entertainment Industrialised: The Emergence of the International Film Industry, 1890-1940 (Cambridge University Press, 2008) opens with a quotation from Marcel Proust:

The real voyage of discovery consists not of finding new lands, but of seeing the territory with new eyes.

A bold claim indeed for any book seeking to make its mark in a territory so exhaustively documented (or so it would seem) as film history. Of course, read the blurb of almost any new film monograph and it will confidently tell you that what lies within is certain to set a new standard for the field or to overturn preconceptions. Open those books and one tends to find exactly as one has found before in countless other monographs, with just a few of the arguments rearranged for novelty’s sake. Open Entertainment Industrialised on any page, and the sense of real discovery is instant. This is history with new eyes.

Gerben Bakker is based at the London School of Economics. His studies into the rise of the international film industry have been exciting a small number of us in the past few years, but they have not made much of a crossover as yet to the wider world of film history. The publication of this magnum opus ought to change things, though it has been issued as part of the Cambridge Studies in Economics History strand (at a hefty price), and is aimed primarily at economics historians. Though some of the language is specialist, the general tone will be clear to all, and the writing is lucid and inviting. It is a book that demands to be read.

His subject is the rise of the film entertainment industry in France, Britain and the United States between 1890 and 1940. That cross-national sweep immediately takes us away from the parochialism of so many film studies, while illuminating the national picture. Its contention is that cinema’s great innovation was not technological, but economic. In a helpful prologue, Bakker set out his theme by reference to the life experience of Charlie Chaplin:

When Charlie Chaplin was nineteen years old he appeared in three music halls a night. On one fine day he started in the late afternoon at the half-empty Streatham Empire in London. Directly after the show he and his company were rushed by private bus to the Canterbury Music Hall and then on to the Tivoli. This constituted the maximum number of venues an entertainer could visit on an evening, and thus the inherent limit to a performer’s productivity.

Yet, barely five years had passed before Chaplin would appear in thousands of venues across the world at the same time. His productivity had increased almost unimaginably. Most of this efficiency jump translated into lower prices, far lower than prices for music hall. Chaplin himself, therefore, was able to capture only a small percentage of revenues. Yet this tiny cut made him the world’s highest-paid performer.

There is the matter in a nutshell. The modern technologies that went with what the author calls the second industrial revolution (bringing with it the almost universal adoption of electricity, synthetic chemicals and the combustion engine) led to a huge leap in productivity. We are now in a world where we expect, without thinking, to have instant access to entertainments from around the world, at any time, wherever we might be located, cheaply or freely, and across multiple platforms. How did we get here? That is what Bakker sets out to describe, not by anecdote or easy assumption, but by thorough powerful analysis of the economic evidence using models established by business history.

‘Total released film negative length and cinema seats, US, Britain, France and Italy, in metres, 1893-1922’, originally from ‘The evolution of entertainment consumption and the emergence of cinema 1890-1940’ (available at http://eprints.lse.ac.uk/5937)

His method is common to other kinds of economic enquiry, one based on understanding of essential principles tested against factual evidence which can be gleaned from contemporary studies or deduced by subsequent analysis. It is a book full of graphs and tables with titles such as ‘Total released film negative length and cinema seats, US, Britain, France and Italy, in metres, 1893-1922’, ‘Management as percentage of all non-creatives in the French entertainment industry, 1901-1936’, ‘Prices, capacity, sales potential, price elasticity and consumer surplus for various types of specator entertainment venues, Boston, 1909’ or ‘Indicators of sectoral shift in the entertainment industry, US, Britain and France, 1900-1938’. It is daunting but exhilarating stuff. All the time that we were enjoying ourselves, this is what was really going on underneath.

Bakker says that his book has three main themes running through it: how motion pictures industrialised spectator entertainment, how a quality race between firms changed the structure of the international entertainment market, and what effect this had on economic and productivity growth. He explores the rise of entertainment generally, the rise of the international film industry as a part of this movement, and then the notion, mechanisms and consequences of industrialised entertainment. Out this investigation he makes seven main claims (though there are many other interrelated findings):

• Cinema industrialised live entertainment by automating it, standardising it and making it tradeable.
• This industrialisation was largely demand-led.
• It was the index case for the industrialisation of other services that would follow.
• In a process of dynamic product differentiation old formats were not competed away, but often reinvented themselves when new formats arrived: theatre changed after vaudeville, vaudeville changed after cinema, and motion pictures changed after television.
• The tradeability of motion pictures integrated national entertainment markets into an international one.
• A quality race in which firms escalated their costs sunk into film production and marketing, triggered in the 1910s, led to the emergence of feature films as we know them now.
• Although the Hollywood studios have won the race, American consumers lost it. Their European counterparts enjoyed a far greater variety of both live and filmed entertaiment, and consumed lots of exotic pictures next to the standard Hollywood fare.

Some of this may seem obvious, but that is because we are familiar with the outcomes. The important point is that the success of cinema in the particular form that it took was not a completely foregone conclusion. With only small variables in pricing (of raw stock, of theatre prices), discoveries in technology, competing entertainments or other socio-economic factors, cinema might never have arisen in the form that it did. He gives the example of cinema’s “major fellow traveller” the Phonograph, which remained “a premium product for a limited elite”. Contra such arguments, cinema can be seen almost inevitably to have filled a gap. Increased wages, falling hours of work, the rapid growth in urbanisation, a consequent demand for leisure, the opportunities provided by mass electrification, all can be said have created cinema – or the gap that cinema filled – because they had to.

Many studies have explored this area with this general thesis in mind. Bakker gives us the figures, and the hard reasoning. We may recognise the names and the general territory, but are encouraged to do so with such notions as deregulated entertainment markets, age elasticity of demand, industrial organisation theory and sunk costs – the latter a key concept for Bakker: costs incurred which can’t be reversed, essentially. Bakker’s argument is that the increase in sunk costs exercised by American film businesses in the period up to and throughout the First World War was their source of strength (crudely speaking, they spent more on production and promotion, and audiences responded to the quality on offer). He writes:

The First World War did matter, but in a different way than previously thought: not primarily because of the disruption of European markets, but because the war prevented the European film industry from taking part in the escalation of quality.

Now there’s a thesis you might like to argue over – but make sure you understand what endogenous sunk costs are first.

So he is right in his bold contention that this is a history with new eyes. Of course film historians have considered the economics of their subject before now, and he acknowledges the work done by David Bordwell, Richard Brown, John Sedgwick, Kristin Thompson and a few others. Yet for the most part film history has been written from a film studies perspective, focussing on style and content, in a form that may please its own community and which has interest to some in art and cultural studies, but which means little to other disciplines. Consequently what looks like an over-analysed subject is one which, rather, has been analysed too greatly in one direction, and far too slightly in others. Why were films made? Why did cinema succeed? Why do we have the entertainment industry that we do? Looking at the money doesn’t answer every question, but it helps answer a fair number of them, and we should have been asking these question (or asking them in a better way) long before now.

Bakker knows that he has produced something truly groundbreaking here. It deserves to have the same impact on film history as Peter Bailey’s Music Hall: The Business of Pleasure has had for music hall or Wray Vamplew’s Pay Up and Play the Game has had for the study of sports history – works that simply open our eyes to the economic realities underpinning their subjects, changing understanding.

There is a gentle mocking tone to some of the book, knocking those of us who have produced film histories which have concentrated on technical innovations, inventors or entrepreneurs, as if they alone made things happen. Of course they didn’t, and of course we have always known that there were greater forces that drove the real take-off of the film industry. What we have needed for so long is a guide to those forces, lighting up the territory for all. Now we have it.

(While you are persuading your local library to invest in a copy of Entertainment Industrialised, you might like to visit Bakker’s research papers site, where there are downloadable copies of several of the papers he has produced leading up to his book.)