India's emerging and vibrant economy around live music and entertainment events offers a potential of Rs 6,000-8,000 crore spending spree, if explored further in the coming days.
A note by economists from Bank of Baroda Research said on December 3 the experience economy can be a significant driver of private spending for F&B, hotels and transport, sponsorship and other expenditures.
"Our conservative to optimistic estimates suggests a push to spending ranging from around Rs 1,600-2,000 crore in the span of last two-three months, from the announcement of these concerts," Bank of Baroda Research said. If considered on an annualised basis, this category can provide the desired impact on private consumption demand, it added.
The ruboff effect of these activities driving up economic growth has been felt across the world. 'Swiftonomics', a term that was coined recently to gauge the economic impact of the tour by the pop star Taylor Swift, showed significant boost to spending across economies, including US, Europe, Singapore, and UK. Some estimates suggest an economic windfall of over $ 4.6 billion in North America and $1 billion for the British economy.
The gigs had a multiplier effect across food & beverages, hotels, transport, merchandise, and others, as well as in stimulating the gig economy. Even the US Fed in its Beige book mentioned this effect and how it offered a boost to the tourism industry.
Now, India is gradually warming up to the ‘experience economy’, with a slew of music concerts lined up, featuring international artists like Maroon 5, Green Day, Shawn Mendes, and Louis Tomlinson, for the first time ever. This is in addition to Coldplay, Dua Lipa and Ed Sheeran coming back to India for concerts.
"The rise in disposable income and a willingness to splurge has resulted in the significant demand surge for such concerts in India. The financial results of Hospitality sector have categorically mentioned MICE (concerts, state visits, sports, expos) as a contributory factor for improving profit margins," the BoB Research note said.
"The direct and indirect spending on these concerts spanning around two-three months will provide a significant boost to the overall spending and consumption," the note added. The upcoming Coldplay concert in Ahmedabad is being held at a venue that has a capacity of more than 1.32 lakh.
Data from Statista places India at 7th position, ahead of South Korea, France and Australia, when it comes to revenue from live events.
The report assessed the economic impact, stating that the spending push is likely to give a leg up to the private final consumption expenditure. The state exchequer too is likely to get a push from tax collections through ticket sales, GST on hotels and restaurants. The events are also expected to give a leg up to 'concert tourism' from both domestic as well as international tourists.
The report also projects that the demand for premium live entertainment surged at 82% growth rate in specially curated global events over 2022.
Any impact of inflation is likely to be benign, the report said, since the share of entertainment is low at 0.11% in the overall CPI basket.
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