The Economics of Taylor Swift: How Taylor's tour boosts local Economies and creates fan frenzy

May 28, 2023 12:35 AM IST

Swift fans desperate for tickets to her long-awaited tour are resorting to bartering and secondary markets as demand far exceeds supply.

For Taylor Swift fans, the anticipation of seeing their idol perform live after a long hiatus since 2018 has reached a fever pitch. However, with only 52 concerts scheduled in massive football stadiums, the demand for tickets far exceeds the supply. Approximately 14 million people attempted to secure seats through Ticketmaster, but the majority were left empty-handed.

Taylor Swift performs during "The Eras Tour" on Friday, May 5, 2023, at Nissan Stadium in Nashville, Tenn.(AP)
Taylor Swift performs during "The Eras Tour" on Friday, May 5, 2023, at Nissan Stadium in Nashville, Tenn.(AP)

Swift's Eras Tour has prompted millions of fans to explore alternative avenues, such as bartering and secondary markets, in their quest for tickets. Facebook groups, reseller apps like StubHub and SeatGeek, and Twitter matchmaking accounts have become the go-to platforms for fans seeking a way into the highly sought-after concerts.

This weekend, Swift will grace the stage at MetLife Stadium in New Jersey for three events, with ticket prices starting at around $1,000 on the resale market. With a stadium capacity of 82,500, up to a quarter-million people will have the opportunity to witness her performance in a single weekend.

Taylor Swift's tour has become a fascinating case study in the dynamics of supply and demand. Much like the frenzy that ensues after a highly anticipated IPO on Wall Street, individuals who managed to secure multiple tickets through Ticketmaster swiftly found eager buyers for their coveted assets. While some may label these sellers as scalpers, others view them as savvy capitalists who seized the opportunity to not only recoup their initial investment but also rake in significant profits. Astonishingly, fans were willing to shell out thousands of dollars for tickets that were initially priced as low as $49 plus fees.

In economic terms, this showcases demand inelasticity, where demand remains high even as prices rise. In this particular case, the demand is fueled not only by the anticipation of seeing Swift perform but also by the accumulated savings during the pandemic and the desire to seize the day in the post-pandemic era.

According to Bloomberg, Swift is reaping the rewards of her highly anticipated tour. Each event is estimated to generate more than $10 million, with ticket sales ranging between $11 million and $12 million per concert. The economic impact of Swift's tour is undeniable.

Twitter accounts like "Eras Tour Resell" have also emerged, amassing over 150,000 followers by connecting fans with sellers who are willing to trade verified tickets without profiting from the transaction. These accounts offer a glimpse into the staggering demand levels. Genuine fans often forego the markup when they have spare tickets, contributing to the limited availability of face-value tickets. On average, their page receives approximately 20 to 30 tickets per week, while prospective sellers are inundated with more than 2,000 responses. The demand is undeniably sky-high.

Bartering has become another noteworthy feature of "Swiftonomics." Some fans have resorted to creative exchanges to secure tickets, such as offering the use of a wedding venue worth $4,000 a day or a year's worth of free pizza in exchange for two tickets.

Others take a risk by showing up at concert venues without tickets, hoping that resale prices will drop closer to the concert time. However, in many cases, prices remain steep, and desperate fans are left disappointed.

Also Read | Taylor Swift kisses rumoured boyfriend Matty Healy on day off from Eras tour

The power of Swift's fan base, known as Swifties, is not only reshaping the concert experience but also making a significant impact on local economies. During her Las Vegas concerts, tourism rebounded to pre-Covid levels in March, and cities across the country, from Atlanta to Boston, have experienced a surge in hotel and restaurant bookings whenever they hosted the Eras Tour.

According to a study commissioned by Live Nation Inc., Ticketmaster's parent company, for every $100 spent on a concert ticket by an out-of-town fan, the local economy benefits from an additional $334 in consumer spending. Many Swifties are spending well beyond $100, showcasing their dedication to their favorite artist.

While some pockets of the economy have cooled since the tour's tickets initially went on sale in November, Swifties' willingness to splurge has remained strong. Their spending habits have surprised economists, who expected more caution in the post-pandemic era. The ability of Swift's fan base to defy expectations and fuel economic growth is a testament to their resilience.

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