Is “shrinkflation”, popularized in recent months, already a has-been? In this period of general rise in prices, a new term is emerging in the Anglo-Saxon media: “funflation”, a contraction of fun (amusement, entertainment) and inflation.
This new buzzword was notably used this month by Corrie Barry, the CEO of Best Buy during the Most Powerful Women Summit (MPW Summit), organized by the magazine Fortune. The director of the American brand specializing in electronics estimated that her customers now preferred to go to concerts rather than buy a computer or a television. And Corrie Barry cites the example of Taylor Swift, whose The Eras Tour, broadcast in cinemas, could be the first in history to generate more than a billion dollars in revenue.
The singer has become the symbol of “funflation”, this trend of increasing prices in the entertainment sector, linked to strong consumer demand. According to the Bureau of Economic Analysis, of the US Department of Commerce, relayed by the Wall Street Journal, Americans are expected to spend the equivalent of approximately $95 billion this year on entertainment tickets (movies, shows, sporting events, etc.). Or 23% more than in 2022 and 12.5% more than in 2019, before the Covid-19 pandemic.
Young people, first concerned
In mid-September, the Bank of America, the second largest American bank, already mentioned this phenomenon in a note. According to her, consumers, frustrated by the cancellation of cultural and sporting events during the health crisis, are ready to pay more for entertainment. This “fear of missing out” (or FOMO, fear or missing out in English) is found especially among young people: a survey Qualtrics for Credit Karma carried out at the beginning of September in the United States shows that the monthly entertainment spending of Generation Z has increased “more than any other generation” since the appearance of Covid.
Across the Atlantic, the increased attraction to live experiences, at the expense of material goods, is reflected in ticket prices. For example, one-day passes to Disneyland just increased by 8.4% and seats for NBA games increased by 60% in one year, according to ticketing company StubHub.
Have fun yes, but at what cost?
The phenomenon of “funflation” is even more striking when it concerns superstars like Taylor Swift, who have built a strong brand: during her North American tour, certain tickets sold for more than $1,000 were snapped up like hotcakes. Before her, it was Beyoncé and her Renaissance World Tour who panicked the economy, sometimes even as far as Sweden. In total, the two singers’ tours are expected to contribute $5.4 billion to U.S. GDP, according to Bloomberg Economics. And they are not the only ones to boost the entertainment economy: since the arrival of footballer Lionel Messi in Miami, ticket prices have risen to 255 dollars, compared to 30 previously.
Many Americans are ready to spend lavishly to see their idol: according to the previously cited survey, 57% of them have recently made sacrifices to treat themselves to a live show. But just as many (58%) have had to reduce their entertainment spending this year due to rising prices. In the land of Uncle Sam, “it has become too expensive to have fun,” observes the Wall Street Journal.
2023-10-23 16:20:29
#Economy #funflation #buzzword #United #States
