At $2,835 a year, entertainment accounts for 5.6 percent of the average American household's spending. The Consumer Expenditures Survey defines entertainment rather broadly; it encompasses "fees and admissions" (presumably to movies, shows, museums, and so on), "audio and visual equipment and services," "pets, toys, hobbies, and playground equipment," and a catch-all "other" category. Rather oddly, however, it does not include "reading," which falls into a category by itself. Tack it on to the entertainment budget, and the total rises to $2,976 per year, nearly as much as health care.
The cost of reading materials--$116 per year--is dwarfed by the $1,036 per year that the typical household spends on "audio and visual equipment and services." This might suggest that most Americans do more TV-watching than reading, but there's another explanation as well; books, newspapers, and magazines can often be enjoyed a lot more cheaply than audio and visual media. If you are lucky enough to live near a good public library, as we do, you can find many, if not most, of the books you'd like to read without having to pay a cent (and without having to find shelf space for them when you're done). And if you have a fast Internet connection, you can read many newspapers and magazines online--along with some other content that doesn't exist in paper form. In fact, this article on the Consumer Expenditures Survey site suggests that increasing numbers of Americans may be doing just that, as consumers spend more each year on Internet service and less on newspaper and magazine subscriptions.
However, all those folks using the Internet to save on reading might not realize that it could help them with those "audio and visual services" as well. As I noted earlier, with our little media spud, we can get pretty much all our TV through the Internet, using some combination of Hulu and downloads from the network sites. At some point, we might spring for a Netflix account to get access to the more obscure shows that we can't get for free--but at $9 a month, it's still a lot cheaper than $55 a month for a basic cable package with 90 channels, only 5 of which we would ever watch.
Similarly, the local library can be a way to save on those "fees and admissions." Our library's selection of videos and DVDs may not be as large as you might find in a Blockbuster Video, but it's a lot more interesting. Most of last year's movies that were of interest to us--including Up, Slumdog Millionaire, and Julie and Julia--can be found there. And we've discovered that we actually enjoy the whole experience of watching them at home more than we enjoy seeing them in a theater. There are no screaming children (or screaming adults on their cell phones), and we don't have to sit through half an hour of advertisements and trailers for films we would never want to see before we get to the film itself. (Digression: What on earth makes the theater owners think that if I show up to see, say, the latest Harry Potter movie, that means that I would be interested in all manner of action films composed mostly of explosions? And don't get me started on the stuff they subject you to if you show up to watch an animated film.) The seats are more comfortable, the popcorn is free (or at least cheap), and if we have to pee, we don't have to climb over several hostile strangers (twice) and miss ten minutes of the movie.
As for "pets, toys, and hobbies"--well, that would be a whole entry in itself.