BITES // 12.07.23 // FUNFLATION IS IN FULL FORCE
Every month we collect six of the best pieces of content published on the web and share them with you because we believe that the most extraordinary thinking is inspired by looking to unexpected places. BITES is a reading list for those who want to bring a little of the outside in.
OVERVIEW -
“Funflation” is the latest buzzword that retailers are leaning on to explain why shoppers are steering clear from durable goods, coming off a summer of record-setting concert spending and pent-up travel demand. U.S. consumers will likely spend $95 billion this year on tickets for concerts, movies and sporting events. The newly-popularized term references the staggering increasing costs people are willing to pay for experiences amid the backdrop of economic uncertainty and dwindling household budgets. 80% of survey respondents said they’re tightening their budget due to rising costs, nearly 70% said they planned to spend the same amount on events in 2023 as they did last year. Gen Zers (35%) are purportedly the most willing to go into debt to afford entertainment, followed by Millennials (33%), Gen X (16%), and Boomers (6%).
1. SWIFTONOMICS AND BEYONOMICS CREATE TOURFLATION
Across the board, the average ticket to live entertainment has risen 14% since 2019 to a total of $79.42. Taylor Swift’s Eras tour and Beyonce’s Renaissance Tour, is expected to have a positive economic impact of close to $5 billion. Beyoncé’s “Renaissance World Tour” is expected to generate $560 million in revenue, while Swift’s Eras Tour could be the first to gross more than $1 billion in revenue. An analysis showed that the Eras show supports more than 300 employment and contributes almost $36 million in direct and indirect spending to the local economy. With tickets and lodging averaging $1,300 per person, it showed that Swift’s followers are willing to travel great distances and pay a lot of money to attend her shows. Meanwhile, the Eras Tour is breaking even more records, with its October concert film release earning $95-$97 million in its opening weekend, becoming the highest-grossing concert movie in the U.S. ever. Beyoncé’s concert film, “Renaissance: A Film by Beyoncé” hit theaters December 1st.
2. LAS VEGAS GOES ALL IN ON F1 FUN
The Las Vegas Grand Prix isn’t for everyone with the cheapest tickets starting at $1,500, and although hotel prices have fallen as the race gets closer, it’s still a pricey proposition. And that’s for those who want to do it on the cheap, without buying one of the gobsmackingly cool-but-expensive hospitality experiences. At the Bellagio they had a shoey bar where guests could buy limited-edition MGM Rewards-branded driving shoes hand-crafted by an iconic motorsport apparel designer. Then, just like Daniel Ricciardo, the shoe will be filled with the patrons’ choice of cocktail. Even on a normal week, there’s something about walking into the lobby of the Aria. But during the Vegas GP week, it had a twist: The “Alfa Romeo Experience” that was a celebration of Alfa’s racing DNA and included things like an F1 show car, a reaction timing game, racing artifacts and signature drinks. The Chandelier is a bar where guests could order one of The Chandelier’s famous Verbena drinks, and guests will see how a picture can transform into a personal AR race-infused story. The store at the Venetian featured all sorts of Las Vegas Grand Prix merchandise for sale. The store also doubled as a lounge for American Express cardholders where they can have a “comfortable place to hang out, charge your phone and shop an exclusive Malbon collection. The Cosmopolitan put on a helmet art display at the hotel where there were six artists that were invited to design helmets for the display.
3. SPORTS TICKETS SURGE DUE TO ‘FUNFLATION’
Rising prices across the economy have contributed to the increased price of sports tickets. The National Basketball Association season tips off next week and ticket sales are up 60% compared with this time last year. This is part of a growing trend by consumers who are willing to spend a lot of money on experiences. The average resale price for a ticket to an NBA game in 2023 is $215, compared with $206 in 2022. The NFL and MLB also saw over 20% bumps in year-over-year resale ticket prices. If NFL fans are looking to attend a game, they’ll have to pay up. The cost of an average ticket has jumped by more than $100 dollars this year from $235 in 2022 to $377 in 2023. League-wide, the prices are up. It appears the demand for the NFL has never been higher. With an expanded 17-game schedule, the league drew a record 18.8 million fans last year and hit a six-year high with an average crowd of more than 69,000. MLS, the top-flight North American soccer league, has also seen attendance figures and ticket prices jump. Overall, Americans spent $36 billion on in-person sporting events in August, compared with $29 billion the year before.
4. DISNEY HIKES UP PRICES FOR THE HAPPIEST PLACE
It’s about to get a bit more expensive to experience the magic of Walt Disney World and Disneyland. The parks are increasing a wide variety of prices for passes, effective immediately, including parking and annual passes. The parks’ most basic tickets, date-based day passes, will remain unchanged and vary based on the busyness of the date. At Disneyland, that least expensive option will run you $104 consistent since before the pandemic and at Disney World it’ll cost $109. At Disney World in Orlando, annual price passes jumped by nearly 10%, with the most expensive Incredi-Pass now selling for $1,449. Parking at the theme park will also rise by $5 to $30 total. For a week-long trip for a family of four it increased by $5,000 to $25,000, or as much as $40,000 for a top-end experience. A Disney spokesperson said “we are constantly adding new, innovative attractions and entertainment to our parks and, with our broad array of pricing options, the value of a theme park visit is reflected in the unique experiences that only Disney can offer.”
5. NETFLIX IS BUILDING PHYSICAL ENTERTAINMENT HUBS
Netflix plans on opening themed stores around the world, dubbed Netflix Houses, where fans can shop, dine, and maybe even try out branded experiences. The concept will start with two locations in the US, Netflix House aims to be the Disney Store of the streaming industry but with a few more additions. According to Netflix’s VP of consumer products, Josh Simon, they’ll feature retail space, dining options, and live experiences, such as Netflix’s popular Bridgerton ball. The first two US locations will open by 2025, and the concept will eventually expand to international locations. Food-wise, it’s an extension of the company’s recent Netflix Bites pop-up in LA and will include a range of fast-casual to more high-end dining. Netflix is using this as a way to market films and shows and take steps toward building revenue-rich entertainment destinations like Disney and Universal.
6. HOLLYWOOD IS HELPING BOOST THE ECONOMY
Hollywood has started filling movie theaters again with box-office hits like “Barbie” and “Oppenheimer”. Crowds have flocked to see the highly anticipated blockbuster films, with some people returning for multiple viewings. AMC Theatres has emerged as one big winner from the “Barbenheimer” phenomenon. It enjoyed the best week in its history between July 21 and July 27. “Barbie” surpassed $1 billion at the global box office just three weeks after its release. With Oppenheimer, there are only 30 theaters in the world that can show IMAX 70mm, 19 of them in the US, which drove up demand at those theaters so much that they had to add screenings 24/7 during the first month of release. 70mm ticket sales were so high, grossing $183 million worldwide, that IMAX reported a 51% increase in revenue compared to the same period last year. The rush of moviegoers has helped boost the US economy, with consumers showing they’re willing to spend.
TAKEAWAY-
The concept, known as “funflation,” refers to the boom in consumer spending on entertainment and experiences, with the high demand running up the cost of enjoying those experiences. Gen Z consumers spend more on recreational diversions than other age groups, with 90% spending money each month on entertainment and 19% spending $300 or more each month. People are willing to cut other forms of directionsary spending in favor of concerts or other events with 54% of respondents in the U.S. saying they’d rather receive a ticket to live experiences rather than a physical gift. While inflation has come down from the 41-year high of 9.1% in June 2022, it’s still more expensive than it used to be to put on an event, because the costs of labor, rent and supplies have all gone up.
