Call it “Swifttonomics” or “Taylornomics,” the 33-year-old American superstar is not only breaking music industry records with her Eras tour, but also boosting the economy and pushing new pay expectations work.
“She’s a very talented artist, but at the same time a smart businesswoman,” says Alicia Modestino, associate professor of public policy, urban affairs and economics at Northeastern University.
On her latest tour, Taylor Swift is tapping into the spending power of women who have seen their salaries rise in the wake of the COVID-19 pandemic and are eager to splurge on traveling and seeing their idol in concert. The singer-songwriter, named by Forbes the second richest self-taught in the American music industry, will give more than 140 concerts on five continents in 2023 and 2024.
However, it’s already clear that Swift’s tour is breaking all kinds of records, Modestino says, in terms of ticket prices, fan attendance and revenue.
On average, almost 54,000 fans attended every concert on the first U.S. leg of the tour, which ended August 9 in Inglewood, California. The average ticket price paid by fans on Ticketmaster was $254, while resale prices climbed into the thousands and tens of thousands of dollars.
Each Eras show grossed approximately $13 million
Each Eras show grossed approximately $13 million, according to Bloombergearning Swift over $300 million after playing the first 22 concerts.
“She writes songs that make people cry. It’s amazing and people want it,” says David Herlihy, teaching professor in the Music Industry Undergraduate Program and Master of Science in Music Industry Leadership at Northeastern. “So, what are you willing to pay for something that makes you want to cry?”
Herlihy estimates that Swift earns more than 100% of the face value of a ticket. Besides concerts, the tour makes money through sponsorships and merchandise sales. Many fans who adore Swift, Herlihy says, want a souvenir that would remind them of the Eras experience, so they buy every accessory available.
“It’s a strange intersection of emotion and capitalism,” Herlihy says.
Swift’s costs include things like paying for elaborate staging, costumes and locations, paying the crew and sharing profits with the songwriters, and could be around 25 cents per dollar, Herlihy says, if not more.
She still makes “a ton of money,” he says, and, according to Forbes, she’s about to beat Elton John, who made a lot of money. $939 million during his farewell tour to Yellow Brick Road, a world record to date. Swift’s worldwide gross ticket sales are predicted to exceed $1 billion.
The power of the Swift supernova is such that its own economic gains also positively affect cities and other people’s livelihoods (besides ticket scalpers). The influx of visitors means they will spend on hotels, restaurants, taxis, Uber/Lyft rides, hot dog vendors and other businesses.
$140 million in consumer spending
A study estimates that two Swift performances in July could boost Colorado’s GDP with $140 million in consumer spending. The Federal Reserve Bank of Philadelphia said Swift’s tour helped boost travel and tourism in the region, making May the strongest month for hotel revenue in the city since the pandemic began.
The Chicago Convention and Visitors Bureau announced that the city set a record for hotel room occupancy in June — nearly 97 percent — thanks in part to the three nights Swift played at a multi-purpose stadium, Soldier Field. Cincinnati’s economy was also boosted when the singer brought Eras to town. And in Las Vegas, it was Swift’s presence, not gambling, that generated the highest tourism spending post-pandemic.
Fans spent an average of more than $1,300 on tickets, travel and new outfits for the concert night, according to Fortune. A survey company, QuestionPro, estimated that the Eras tour could generate up to $4.6 billion in consumer spending for the U.S. economy in total.
Swift exists in a contrasting context, Herlihy says. The most talented aspiring artists will never succeed. The music industry, he says, consists of multiple distinctive industries and jobs like music directors, sound technicians, booking agents, broadcasters, journalists, graphic designers, songwriters, publishers , radio stations and record labels. Companies in these vertical industries make money from artists, but rank-and-file workers don’t make as much money. A touring crew consists largely of concert workers and private contractors like catering staff, roadies and stagehands who might not have the next gig scheduled after the tour ends.
Swift stunned everyone in late July when she decided to split her profits with her Eras team, spending $55 million on bonuses for everyone from backup dancers to sound technicians to truck drivers. Such generosity is another testament to the singer’s disruptive force, Modestino says.
Semi-truck drivers received $100,000
It was widely reported that each of the 50 to 80 hard-working tractor-trailer drivers received $100,000 from Swift, and there could be a number of motivations behind the gracious gesture, North America experts say. East.
“I think Taylor is doing what she believes is the right thing and also cleaning up her image,” Herlihy says.
Swift has been able to dole out significant bonuses, he says, because she’s the one calling the shots in his business empire. She’s CEO of several companies that make up the “Taylor Swift Galaxy,” he says, and doesn’t answer to a management company or shareholders for her decisions.
Its choices could reflect the trend economists are seeing among other employers, Modestino says.
“Profits from COVID are up about 25% for businesses right now, and wages are up about 14%,” she says. “So we see employers sharing some of these profits with their workers. »
At the same time, the U.S. job market is incredibly tight, Modestino says, with the unemployment rate falling to its lowest level (3.5%) since 1969. Employers fear losing workers or laying off someone one because staff turnover is very costly. and they want to ensure they maintain their workforce.
The turnover rate in the trucking industry is particularly high, Modestino says, averaging around 55 to 60 percent and sometimes reaching 100 percent, largely because most truckers are away from their families for extended periods of time. . The team touring with Swift has been away from her family for 24 weeks.
Additionally, there is a massive shortage of truck drivers in North America and some companies are having difficulty negotiating with the Teamsters union, Modestino says. For example, the 99-year-old trucking company Yellow Corp. closed its doors in July because it failed to reach an agreement with the Teamsters union that represents about 22,000 of its workers .
The Taylor Swift brand cannot allow disruption
The Taylor Swift brand can’t allow any disruption to the tour, says Nada Sanders, distinguished professor of supply chain management at Northeastern. Each concert is a major feat of supply chain management, she says, and every piece must arrive on time.
“You basically have what looks like a small town with all these different teams and different categories, from catering to different stages to lighting to guitars to microphones to LED screens,” Sanders says. “The problem is that it has to be coordinated. It’s not about bringing them to one event at a time, but you also have to coordinate the movement.
To coordinate the arrival of dozens of semi-trailers in a single location, such a complex operation relies on real-time measurements from radio frequency identification and GPS, as well as predictive analytics to estimate the arrival time of each truck.
“This is by no means a sign of cynicism on my part, but she is going to provide truly excellent service and people as she embarks on more tours of Europe and South America,” Sanders said.
Will anyone else in the industry match Swift’s generosity? Herlihy sees some artists doing this primarily so as not to appear greedy in comparison.
Modestino says employers often follow sweeping changes in compensation in industries competing for workers. For example, when Walmart raised the minimum wage to $15 an hour before the pandemic, Target and other big box stores did the same to compete.
“I was always given the advice: When you can be generous, be generous,” she says. “And I think we see her doing that. But it will also ensure that she will be incredibly successful and keep the show going for as long as she needs it to.
Alena Kuzub is a reporter for Northeastern Global News. Send him an email to a.kuzub@northeastern.edu. Follow her on Twitter @AlenaKuzub.
