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The Impact of Music Concerts on Inflation: How Concert Prices and Attendance Contribute
Economists Consider Concerts as a Potential Contributor to Inflation
As inflation remains high in many countries, economists are exploring the surprising impact music concerts may have on rising prices. Artists like Beyoncé and Taylor Swift are attracting millions of fans to their tours, despite the high costs of tickets, travel, and accommodation. Inflation remains stubbornly high in developed economies, with interest rate rises failing to bring prices down. Concerts and the economy may be more interconnected than previously thought.
The Rising Costs of Concert Attendance
Economists have observed the soaring prices of concert tickets and related expenses. Klaus Baader, global chief economist at Societe Generale, noted that ticket prices have skyrocketed, and so have the costs of food and drinks at venues. Additionally, travel and accommodation costs associated with attending concerts are often high. Filip Andersson, head of research for Sweden at Danske Bank, highlighted the impact of Beyoncé's tour stop in Stockholm, where hotel prices surged due to high demand. These rising costs of concert attendance may contribute to inflation.
Economists Differ on the Visible Impact of Concerts on Inflation
While some economists believe that concerts may have a visible impact on inflation, others are more skeptical. Philip Shaw, chief economist at Investec, emphasized that concert prices themselves have increased but questioned whether the impact of a specific concert can be seen in overall inflation numbers. However, Shaw acknowledged that the increasing expenses of concerts may have a broader influence on inflation.
Factors Influencing Rising Concert Costs
According to economists, various factors contribute to the rising costs of concert tickets. Baader mentioned that post-pandemic concert culture involves larger, longer, and more extensive tours by artists who have been unable to perform for a long time. Shaw also highlighted the shift in artists' revenue sources from selling physical music to focusing on concerts. Moreover, broad economic patterns, particularly in countries with stringent pandemic restrictions, play a role. People who have accumulated savings during the pandemic are eager to participate in live events, driving up demand and prices.
The Persistence of High Concert Ticket Prices
Even as inflation eases, economists expect concert ticket prices to remain high. On the consumer side, more disposable income and increased demand contribute to this trend. On the artists' side, tours have become a crucial revenue stream, adding to the resilience of concert prices. While the impact of concerts on inflation may be temporary, recurring effects could be seen when high-profile artists like Taylor Swift tour different cities. However, economists caution that the long-term effects of concerts on inflation are uncertain and subject to change.
The Business Implications of Concerts on Inflation
A Potential Opportunity for New Businesses
The impact of music concerts on inflation presents an interesting opportunity for new businesses in the entertainment industry. As ticket prices and attendance contribute to rising prices, entrepreneurs can capitalize on this trend by offering innovative solutions to mitigate the high costs associated with concert experiences.
Catering to Affordability and Accessibility
One way newly formed businesses can capitalize on the rising costs of concert attendance is by focusing on affordability and accessibility. By offering discounted ticket options, package deals that include travel and accommodation, or even organizing local viewing parties for concerts, entrepreneurs can cater to music enthusiasts who are unable or unwilling to bear the full financial burden of attending a live concert.
Creating Ancillary Revenue Streams
In addition to addressing affordability, new businesses can explore the creation of ancillary revenue streams related to concerts. This can include partnering with artists to develop merchandise lines, offering exclusive digital content or experiences for fans unable to attend concerts, or providing services such as event planning and logistics for concert-goers.
Innovation in Concert Experiences
New businesses can also leverage the impact of concerts on inflation by focusing on innovative concert experiences. This could involve the development of virtual reality concert platforms, immersive audiovisual technologies, or even collaborations with artists to create unique and memorable live experiences beyond the traditional concert format. By offering differentiated experiences, these businesses can attract audiences and mitigate the impact of rising ticket prices.
A Constantly Evolving Landscape
However, entrepreneurs must remain cognizant of the ever-changing landscape of concerts and inflation. While concerts currently contribute to inflation, the long-term effects are uncertain and subject to change. New businesses should closely monitor economic trends, consumer preferences, and artist revenue models to adapt their strategies accordingly.
In conclusion, the impact of concerts on inflation presents both challenges and opportunities for new businesses in the entertainment industry. By addressing affordability, creating ancillary revenue streams, and focusing on innovation, entrepreneurs can navigate this dynamic environment and position themselves for success in the concert industry.
Article First Published at: https://www.cnbc.com/2023/07/11/taylor-swift-beyonc-springsteen-could-be-making-inflation-worse-with-tourflation.html