They are calling it funflation. How Barbenheimer, Beyonce boost the US economy

Due to the popularity of the Barbenheimer, and pop stars Taylor Swift and Beyonce, Americans have recently started spending a lot more money on entertainment and live events. Bank of America, the United States’ top financial organisation, said in a report titled Funflation in Full Force that the abrupt increase in spending in these sectors may be a long-lasting trend. It also described it as “funflation.” But what exactly is it? Let’s take a closer look. Also read: 'Shake It Off': How Taylor Swift fans caused tremors in Seattle About “funflation” According to the Times of India, the Bank is looking into the phenomenon called “funflation,” which occurs when consumers spend more money on live entertainment as a result of pent-up demand and greater savings following COVID-19. One example of funflation is the tours of renowned singers Taylor Swift and Beyonce. According to a Bloomberg analysis, the tours of both these singers might boost the US gross domestic product by an estimated $5.4 billion. The industry is “shining brighter than ever” The report claims that funflation may result in a long-lasting change in consumer behavior that will ultimately be advantageous to the entertainment sector. According to Bank of America analyst Jessica Reif Ehrlich, the live entertainment industry is shining brighter than ever in the media and entertainment environment.

The Eras Tour has been the most meaningful, electric experience of my life so far and I’m overjoyed to tell you that it’ll be coming to the big screen soon 😆 Starting Oct 13th you’ll be able to experience the concert film in theaters in North America! Tickets are on sale now at… pic.twitter.com/eKRqS8C7d1

— Taylor Swift (@taylorswift13) August 31, 2023

Yahoo! News reported that she singled out Live Nation (LYV), among other businesses that can profit from the expansion of live events, as an example since “they are actively involved in most, if not all, aspects of the live event ecosystem.” Live Nation CEO Michael Rapino in his Wednesday speech at Bank of America’s Media, Communications, and Entertainment Conference reaffirmed that live events are unique products that would continue to expand as a result of social media. He explained, “It’s that important badge in (a fan’s) life to make sure that they can tell people they were at the Beyonce show. Artists and what they’re able to drive with that relationship with that fan (through live) is just a bond that we’ve never seen before – especially with social media.” Five factors for long-term growth For the industry’s long-term growth, Ehrlich identified five factors:

• The ongoing shift of consumer spending towards services and experiences
• The ability to charge higher prices amid rising demand
• The positive impact of social media apps like TikTok on global fan base and awareness
• The resilience of live events against digital disruption
• The emergence of experiential marketing.

Also read: Tourflation's here: How Taylor Swift, Beyonce are pushing up inflation Swiftonomics According to QuestionPro research, Taylor Swift’s Eras tour, a tribute to each phase of her 17-year career, which began in March 2023 and will last through November 2023, is expected to have a positive economic impact of close to $5 billion. With expected ticket sales in North America alone totaling $2.2 billion, the tour is on track to surpass all previous records for the largest tour. “Unsurprisingly, we think that talent, especially artists with huge fan followings, will be able to get more value out of the ecosystem (mainly driven by increasing supply and ticket pricing), while venues, which have multiple independent revenue streams, will capture the most value,” Ehrlich said, according to Times Now. The singer is fostering the local economy and adding jobs through her tour.

After years of wanting to play in Mexico City, just got to play 4 of the most unforgettable shows for the most beautiful and generous fans. Feeling so grateful for the memories we’re making together on this tour 🥹 TE AMO. 🇲🇽

📷: @hvivas24 @GettyImages pic.twitter.com/swy0jBIqdT

— Taylor Swift (@taylorswift13) August 28, 2023

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The analysis calculates that each Eras show supports more than 300 employment and contributes almost $36 million in direct and indirect spending to the local economy. Averaging $1,300 per person, it was also discovered that Swift’s followers are willing to travel great distances and pay a lot of money to attend her shows. Data from Bernstein shows that during Swift’s travels, the average revenue per room in American states was more than four percentage points more than the national average. According to a CNBC report, the average revenue per room in these states climbed by almost seven per cent during the months she visited compared to the same periods the year before. As fans revisit her older albums and songs after seeing her perform live, her tour is also increasing the demand for streaming platforms. Swift’s back catalog had a nearly 80 per cent increase in streams in the weeks following the start of the tour, according to Spotify. Because of her carefully chosen playlists and collaborations, Swift’s music also benefits other musicians by introducing them to new songs and genres. Also read: Taylor Swift’s cat is worth Rs 800 crore: Just how do pets become Richie Rich? Robust growth engines Despite the growth, there are still certain concerns. As Ehrlich cautions, “We see the macro environment/consumers’ willingness to spend during a potential downturn and regulatory as the two biggest overhangs in the near term.” The Taylor Swift and Beyonce tours, as well as the Barbenheimer debut, were “one-off” events, and Morgan Stanley agreed, stating in a separate note that their absence could have the opposite effect on the economy in the second half of the year: “The unwinding of these events, combined with the expiration of the student loan moratorium equal 1.4% downside to real (Personal Consumption Expenditures) in 4Q23.” But the live entertainment industry has been one of the most robust growth engines of the music industry over the past 20+ years,” she said, adding that while initially it took a hit from COVID-19, “consumer demand for live entertainment has come roaring back.” “This backdrop has supported supply and demand tailwinds which all appear to be sustainable over the next several years.” With inputs from agencies