When taking into account time, services can experience similar productivity gains as manufacturing. Motion pictures constituted the first technology that industrialized a labour-intensive service. Measuring output in time spent consuming them doubles output growth from 4.2 to as much as 9...

This paper identifies four basic economic characteristics underlying the evolution of the motion picture industry. First, the importance of endogenous sunk costs led to a quality race in the 1910s that left European companies behind. Second, the fact that marginal revenues equalled marginal...