Hollywood is helping boost the economy as fans flock to 'Barbie,' 'Oppenheimer,' and Taylor Swift's Eras Tour
Insider
- The entertainment industry has proved a boon for the US economy amid recession fears.
- Taylor Swift's Eras Tour and "Barbenheimer" have been key drivers of consumer spending this year.
- "The Super Mario Bros. Movie" has also boosted theaters that are still struggling post-pandemic.
AI isn't the biggest story of 2023 – it's Hollywood hogging the limelight.
From Taylor Swift's huge tour to the release of highly anticipated Hollywood movies, music and film have also been having a positive effect on the US economy.
Wall Street banks and even the Federal Reserve have taken notice of the entertainment sector's impact, helping quieten fears of a looming recession.
With the Fed hiking interest rates at the fastest pace in history — up 500 basis points over the past year — to cool 40-year high inflation, investors have long feared an economic downturn.
Yet the recession market experts have predicted to death still hasn't arrived. If anything, the US economy appears to be holding up — and that's partly thanks to Swift and blockbuster films including, "Barbie," "Oppenheimer," and "The Super Mario Bros. Movie."
Taylor Hill/Getty Images
Taylor Swift
The "Anti-Hero" singer has made waves with her debut Eras Tour that's included dozens of shows across 17 states.
"Swifties" seeing the concerts have helped boost hotel revenues and could generate $4.6 billion in total consumer spending, the Common Sense Institute said. That's bigger than the GDP of 35 countries.
Moreover, Swift also shelled out $100,000 bonuses to truckers on her tour. In total, she doled out over $55 million in bonuses to staff, including dancers, crew, and caterers in what's not only a win for those workers but the economy too.
The considerable economic impact of Swift's shows were noticed in Philadelphia in what caught the eye of the Fed.
"Despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city," the Fed said in its most recent Beige Book.
Consumer spending is a key driver of economic growth — and some Swift fans are spending up to $20,000 to see the 33-year-old superstar.
"The only thing more rare than an open seat at Taylor Swift concert this year is a slowdown of the US consumer," Jamie Cox, managing partner at Harris Financial Group, told Insider.
"Revenge travel is the bounce back to normal life that Covid took away from all of us. Now, folks have a completely different attitude towards money and putting off travel as the 'fear of missing out' is quite strong. The phenomenon demonstrates the brute force with which the US consumer can drive the economy — give them money and they will spend," Cox added.
"Barbenheimer"
Another promising sign for the economy is the "Barbenheimer" phenomenon. The release of "Barbie" and "Oppenheimer" on the same day last month not only breathed new life into struggling movie theaters following the pandemic, but has also driven wider consumer spending on entertainment, Bank of America noted.
The Wall Street bank said in a note that its cardholders have spent 23.7% more on entertainment in the week ending July 29 compared with the same period last year. "'Barbenheimer' likely drove the continued surge in year-on-year entertainment spending growth," analysts Shruti Mishra and Aditya Bhave wrote in a note.
Meanwhile, AMC Theatres posted record revenues in its 103-year history between July 21 and July 27, when "Barbenheimer" were finally released after months of publicity.
In two weeks, "Barbie and "Oppenheimer" have grossed hundreds of millions each, with Greta Gerwig's life in plastic-themed film set to make at least $1 billion at the global box office.
Nintendo/Universal
"The Super Mario Bros. Movie."
Bringing some more optimism to global economies is "The Super Mario Bros. Movie" — an animated adaptation of the Nintendo video game.
It's the first movie to cross the $1 billion benchmark globally this year, leaving Marvel's "Ant-Man and the Wasp: Quantumania" in the dust.
The monumental success of "The Super Mario Bros. Movie" turbocharged Nintendo's revenue by 50% to $3.2 billion in its first fiscal quarter, while net profit was up 52%.
"In the first quarter of this fiscal year, both sales and profits were notably large for a first quarter mainly due to the concurrent releases of 'The Super Mario Bros. Movie' and 'The Legend of Zelda: Tears of the Kingdom', and we made steady progress toward our full-year earnings forecast," Nintendo said in a earnings release Thursday.
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