Published on 15 Mar 2024

The gift of superstar concerts: Swiftie lessons from Auntie Economist

Taylor Swift’s marketing juggernaut is an economic and cultural powerhouse to learn from.

Taylor Swift has left town and for the Swifties here it must hurt just like after the end of a popular K-drama, only a thousand times worse. This auntie is no Swiftie, but she gets it, girl, she gets it.

I have not attended any of the American singer-songwriter's concerts here during her five-continent The Eras Tour, but a friend of the family says their friend's cousin managed to get the coveted fedora at one of the concerts. Does that count towards having a connection?

With just this tenuous link, here are my thoughts on the impact -- economic and otherwise -- that the Taylor Swift juggernaut has had on Singapore.

Swiftie-nomics 101: The spillover effect

We know the numbers and they are impressive. Economists have estimated the positive economic impact to be to the tune of several hundred million dollars. DBS Bank economist Mr Chua Han Teng says: "We expect Singapore's hospitality, food and beverage, and retail activities to benefit from higher foreign tourist spending, given that a large number of overseas fans have flown in to attend the concerts."

DBS puts the dollar boost at between $300 million and $400 million, representing about 0.2 per cent of Singapore's first quarter gross domestic product (GDP). The median estimate in a Bloomberg survey is for first quarter GDP to expand by 2.9 per cent, the fastest pace in six quarters.

That level of growth is not surprising, with reports including one by global advisory firm Oxford Economics arguing that concerts and the live entertainment industry are "a significant economic engine".

In a report looking at the industry in the US in 2019, it assessed the economic impact including GDP, household income and jobs and taxes at US$132.6 billion (S$177 billion) supporting 913,000 jobs with associated labour income of US$42.2 billion.

In terms of jobs, this sector creates an entire army of them, including stagehands, lighting technicians and ushers.

Oxford Economics also analysed the revenue generated in addition to the cost of the concert ticket, itself a significant contributor. An out-of-town attendee would rack up on-site spending such as parking, concessions and merchandise. Then there are transport costs to the venue, off-site food and beverage purchases and off-site retail purchases. There would also be recreation purchases as well as accommodation.

But is it just a one-trick pony?

However, while Taylor Swift concerts contribute massively to the economy, this raises the question of whether the benefits are more than a one-off.

For example, when the Formula 1 race hits town, businesses in the Suntec City area often complain because workers stay home to avoid the road diversions and closures. Business slows at some food outlets, even as hotels near the circuit see improved occupancy.

During the six sold-out Taylor Swift shows, it was not uniformly good business across the board. Some eateries at the Kallang Wave Mall near the Singapore Sports Hub where Swift performed were affected as patrons avoided driving to the area.

On the other hand, cafes and bakeries near the hotels where fans stayed enjoyed a spike in business. Shops with clothes and accessories suitable for Swifties wanting to dress like their idol did well too.

The lesson is that businesses have to be nimble to be able to take advantage of the increased customers whenever performers are in town.

As for jobs, there were many temporary ones on offer during the concert period. A check online showed openings for promoters at pop-up stalls, or to man concession booths. There were even jobs for cooks.

As the entertainment industry expands and more acts come to town -- after all, there was Coldplay recently and Filipino-American Bruno Mars soon -- such jobs will be aplenty. The challenge is whether as the live entertainment industry grows, this will translate to growth in permanent, decent-paying jobs in related sectors such as event management or logistics. On Broadway and London's West End, many jobs go to freelancers.

Lasting effects for our events scene

A large proportion of the 300,000 concert-goers in Singapore were from overseas as there was an exclusive deal making the Republic the only stop on the South-east Asian leg of Swift's tour.

The arrangement spurred region-wide demand for tickets for the Singapore show, especially as the only other venue in Asia was Japan.

Given the unhappiness felt by some Asean neighbours over the exclusive deal, there will be a question mark over whether the stars will be aligned for such a mega-event to be repeated anytime soon. But rest assured, there will be longer-term economic benefits, with the impact likely to flow to the overall local events industry.

DBS' Mr Chua points out that in the third quarter of 2023, total employment levels in the hospitality and food and beverage sectors had already recovered to slightly above pre-pandemic levels. And,"such large-scale popular events (like Taylor Swift's Eras tour) will help to bolster Singapore's position as a thriving live music entertainment venue in the long-term".

He added: "They also build Singapore's credentials as a vibrant events hub, amid continued investments and efforts to grow a solid pipeline of business and leisure offerings, which will grow tourism receipts steadily."

Associate Professor Walter Theseira from the Singapore University of Social Sciences says having a few headline events is necessary to put Singapore on the map for the Mice (meetings, incentives, conferences, and exhibition) sector, noting this gives "more confidence to the smaller events that make up the bulk of the industry. Hence, some of the branding and capability may translate to an ongoing boost".

Indeed, the fact that Singapore pulled off the transport logistics and crowd management on such a huge scale without incident will undoubtedly enhance its reputation as a concert or conference destination.

The rise of live music and entertainment

Still, it's not as if Singapore was non-existent on the concert circuit pre-Taylor Swift. Oldies like me would remember that Michael Jackson performed here in 1993 and 1996. Fans were equally falling over themselves to catch a glimpse of the superstar.

Post Covid-19 pandemic, Singapore's concert scene has been active, with Hong Kong superstar Jacky Cheung performing to rave reviews.

But with The Eras Tour, I can't remember the last time an event seemed to resonate so powerfully with so many Singaporeans.

There were those who had scrimped and saved for that one precious ticket, even if they were stuck up in the rafters. At least they could breathe the same air as their idol. Others were content to camp outside the stadium and soak up the music.

There were many teenagers whose parents and grandparents chipped in to help them buy pricier tickets to be closer to the stage.

Many dressed up to emulate the star and celebrate this once-in-a-lifetime experience. It wasn't just dating couples and friends; the Taylor Swift concerts brought many families together who bonded over the experience.

However, it wouldn't be Singapore if there were some attendees from the Fomo or "fear of missing out" category. They were not die-hard Swifties, but they enjoyed the concert vibes. No harm, too, that attendance moved them higher in their friends' estimation.

Such was the thrill of the chase -- such as securing the access code to buy tickets, staying up late, and logging onto a website to secure the best seats -- that it became part of the overall experience. Landing a ticket with a good view when all others failed earns serious bragging rights. Spending hours on a system only for it to go offline just as you're about to pay also yields a memorable tale of woe.

This lived experience factor also underlines how Singapore is part of the trending growth of the live music entertainment industry.

US-listed Live Nation Entertainment, which dominates the ticket market, called 2023 its "biggest year ever". CEO Michael Rapino says there is "a fundamental shift in consumer spending habits toward experiences", as 92 per cent of fans say they would attend more or the same number of concerts in 2024.

In an interview he noted that artists have become "direct [to] consumer brands" that build their own audiences, while Live Nation sells the tickets, but as there are far fewer tickets than the demand, scarcity is created.

However, the higher costs of touring that come from fancier sets and a large production crew mean that only the top performers will come to the region as only they will be able to command ticket prices to make it worth their while.

The power of celebrity marketing

The Swiftie concerts are the ultimate masterclass in the power of celebrity and its influence on consumers.

There's the build up of anticipation with months of waiting after the purchase of tickets. As the concert date nears, there are concert-related pre-events, merchandise to purchase and planning for the day itself. Such is the psychological process that an incredibly strong consumer attachment is created.

Central to the success story is that Swift's lyrics resonate with audience-goers and create a further emotional connection. Associate professor of marketing at Nanyang Business School Julien Cayla notes that Swift "speaks to her audience on a personal level and addresses societal issues like sexism that have become a major part of the public debate".

It may seem that the Taylor Swift phenomenon is groundbreaking, but Prof Cayla points out that 200 years ago, writer Jane Austen -- who penned classics like Pride and Prejudice -- "similarly addressed issues young women were dealing with: love, relationships, societal norms, and the struggles of women trying to find their place in the world".

He notes: "These examples should teach marketers that you have to understand the culture in order to resonate."

And because Taylor Swift has such a strong connection with her fan base, whatever brand she touches, turns to gold.

It certainly helps that her audience mainly hails from the millennial and Gen Z groups, who are seeing increased spending power.

Market research firm GfK considers a millennial to be someone born between 1980 and 1997 (27 to 44 years of age) and a Gen Z, born between 1998 and 2012 (12 to 26 years of age). Millennials are entering their prime earning and spending years, says GfK in a recent report. It adds that Gen Z is not yet in full consumption mode, but could surpass the spending power of millennials in 2031.

Gen Z and millennials in Singapore and Asia certainly fit the bill for that spending power. Apart from the pricey tickets, they were splashing out on $60 T-shirts.

But it is not only about the Swift-mania willingness to spend. It's also about how the Swift playbook created an entire concert-going experience, including bonding with fellow Swifties these past weeks in ways that were meaningful and memorable.

Simply put, Taylor Swift comes across as relevant and authentic, and cannily used technology and social media to amplify her message. The marketing machine may have left Singapore, but there are lessons we can learn from the interrelated cultural and economic effects of her Eras tour.

Source: The Straits Times