People would make their own entertainment if sports and Hollywood were not available: games, stories, conversation, crafts, and so on. Our lives might even be a bit richer for it.
And in that sense, the entertainment industry captures value that we would be making anyhow. Yes their entertainment is better somehow, better in the sense that people will pay for it, so this is the bottom-line "better", inclusive of demand generators (eg, movie trailers, team rivalries, etc), and not necessarily a general-welfare "better".
You might even argue that this is welfare-capture: once you have seen the movie trailer (for free), or acquired team-loyalty (for free), your welfare becomes dependent on seeing what happens (not free). My son saw a trailer for WALL-E last night. Now he wants to see it. Having seen it, will his net welfare have increased? I don't know. He seems happy enough with his blocks and pencils and such.
> People would make their own entertainment if sports and Hollywood were not available
I'm afraid I disagree with you. I notice even when getting together with a group of friends to play games, there always tends to be someone who is happy to just sit back and watch the games take place. Some will make the entertainment and others will want to watch. It seems to be basic human nature; professional sports and Hollywood have just figured out how to make money from that.
And in that sense, the entertainment industry captures value that we would be making anyhow. Yes their entertainment is better somehow, better in the sense that people will pay for it, so this is the bottom-line "better", inclusive of demand generators (eg, movie trailers, team rivalries, etc), and not necessarily a general-welfare "better".
You might even argue that this is welfare-capture: once you have seen the movie trailer (for free), or acquired team-loyalty (for free), your welfare becomes dependent on seeing what happens (not free). My son saw a trailer for WALL-E last night. Now he wants to see it. Having seen it, will his net welfare have increased? I don't know. He seems happy enough with his blocks and pencils and such.