The App Economy Is Now 'Bigger Than Hollywood'

The web might be the most important medium in American culture.

Lucy Nicholson/Reuters

What is the major cultural force in America right now? It might just be apps and the web.

While reading a self-laudatory Apple press release, the technology business analyst Horace Dediu found something remarkable: The iOS App Store distributed $10 billion to developers in 2014, which, Dediu points out, is just about as much as Hollywood earned off U.S. box office revenues the same year.

Working from that data, Dediu makes a startling provocation:

Although the totals for Domestic (U.S.) Box Office are not the complete Hollywood revenues picture, Apple’s App Store billings is not the complete App revenue picture either. The Apps economy includes Android and ads and service businesses and custom development. Including all revenues, apps are still likely to be bigger than Hollywood.

(The emphasis there is mine.)

Now, for “App economy” revenue worldwide to approach Hollywood revenue worldwide, those ads and services would have to bring in a lot of money. Though 2014 data isn’t yet available, box offices worldwide have brought in twice as much as they have in North America since 2010. In other words, the ads, services, and Android equivalents that Dediu mentions would have to bring in more than $20 billion.

One thing is true, though. In its release, Apple claims that its App Store has created 627,000 jobs. Dediu contrasts this to the 374,000 jobs that Hollywood creates. (The Hollywood job creation data is older—it’s from a Congressional survey in 2011—but it also goes further back. Hollywood has created a similar number of jobs per year since 1998.)

From a sheer personnel standpoint, then, the App economy is almost certainly bigger than Hollywood. And as Dediu writes, it’s also “easier to enter,” “has wider reach,” and “is growing more rapidly.”

The iOS App Store Versus Hollywood U.S. Box Office
Horace Dediu

To me, that the American app industry may eclipse the American film industry is more interesting for what it means culturally. There’s a growing sense that the products of the sector we usually call “tech” are attaining cultural primacy—the web is the new TV.

What does this feel like? For me, it’s seeing ads for "Clash of Clans" during the Super Bowl, or the thing where cable news talks more about Twitter and Facebook than their users talk about it. It’s where BuzzFeed feels more culturally ubiquitous than MTV. It’s where Nickelodeon introduces a nightly primetime show that literally includes, as a major feature, the viewer watching child stars watching YouTube videos. It’s Grumpy Cat’s Worst Christmas Ever. It’s YouTube stars interviewing the President.

Perhaps this iteration of web-iness-as-culture is only a fad, a symptom of a wider tech bubble. (It’s hard to remember where the MSN in MSNBC first came from.) But as the web slowly weaves its way throughout American culture, we’re going to see stats like this more often.