Being a part of the Gen Z community myself, I know the rush of adrenaline that passes through all of our bodies when we find out that our favourite singer is coming to perform a city away. We immediately begin searching for flight tickets and planning the pitch we will use to convince our parents for giving us permission to attend. As times have advanced, live concerts are no longer only for the elite and wealthy, which has induced a boost in local economies and the country GDP. In India, for instance, there are concerts available for just 100 rupees, with performances by renowned artists such as Yo Yo Honey Singh and Prateek Kuhad. Let us dive into the economics involved with concerts, which turns out to be more extensive than we might think.
For starters, live concerts involve various revenue streams including ticket sales, merchandise sales, sponsorships, food and drinks, and ancillary revenue. In 2019, the industry generated a record-breaking $5.5 billion in revenue, marking the eighth consecutive year of growth. Ticket sales serve as the primary source of revenue for concerts. The generation of revenue is based on the popularity of the artists coming to perform. The International Ticketing Yearbook 2020 published by the International Ticketing Association (INTIX) reported that global ticket sales reached $25.3 billion in 2019, with concerts accounting for a significant portion of this figure. For instance, the annual Coachella Valley Music Arts and Festival in the United States spots some of the largest celebrities of our generation and draws a massive crowd, including both national and international attendees. In 2019, the festival generated over $100 million in revenue, as reported by Billboard.
The graph below showcases the estimated economic impact of BTS on concerts held in Seoul in South Korea in October 2019.
Moreover, a study of concerts and live entertainment industry commissioned by Live Nation and produced Oxford Economics examined the economic impact of concerts in 2019 where they found that the business generated $132.6 billion in the United States alone. The study concluded that “concerts will be critical to economic rebound post-pandemic” as reported in Billboard. The study also found that concerts generate $55.2 billion in spending each year in the U.S., including venue operational spending covering show production costs and concert attendee before- and after-show spending. Not only that, but concerts also create jobs for locals and supports the livelihood of citizens. Hosting food and beverage stalls generates high amounts for event organizers, with some of the most respected sponsorships in their bank. For example, Coachella has partnerships with major multinational corporations such as Adidas and Neutrogena. Conclusively, the concert industry is only expected to rise with Covid precautions being lifted by local governments and social media awareness increasing.
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