The summer of Barbenheimer, Beyoncé, and Taylor Swift, wasn’t just good fun, it was also good (and big) business. But now, Morgan Stanley warns in an analyst note, winter is coming.
Morgan Stanley economist Sarah A. Wolfe estimates the two concert tours and Barbenheimer added about $8.5 billion to U.S. growth in the third quarter, encompassing the summer spending months. When that windfall evaporates, she warns, so will the accompanying 2% increase in consumer spending, which prompts the question: Was the ebullient American consumer, often female-oriented, the only thing that staved off the long-predicted recession?
Against the backdrop of persistent warnings from economists and Wall Street that a recession was near, the “revenge spending” of the early post-pandemic era was crowned by bona fide pop culture phenomena in the summer of 2023. In the world of movies, “Barbenheimer,” the internet joke, quickly became a marketing strategy, pitting Christopher Nolan’s Oppenheimer, about the tragic godfather of the atomic bomb, against Greta Gerwig’s Barbie, an explicitly feminist blockbuster about the famously patriarchally sexualized mid-century doll.
While in music, fans flocked to mega-size tours from Beyoncé and Taylor Swift—stars so big they have whole online armies dubbed “The Beyhive” and “The Swifties”—often performing at the same venues. Rather than splitting their allegiances, consumers simply opted for as many nights out as they could. The National Association of Theatre Owners said that at least 200,000 people bought tickets to see Barbie and Oppenheimer on the same day—and that was just on opening day.
“Barbenheimer is two movies, not one,” says Paul Dergarabedian, senior media analyst at Comscore and an expert on the movie business. “If you were a fan, it became one event to the benefit of both films in a really unprecedented way.”
Meanwhile, Taylor Swift’s tour was the first ever to cross $1 billion in total revenue. Beyoncé’s could top that figure by the time her tour ends on Oct. 1. The Swift tour, in particular, was so economically seismic the Federal Reserve Bank of Philadelphia found that the month of her concert was the best for hotels in the area since the start of the pandemic.
“Rivalries are good,” Dergarabedian says of why this level of competition benefits all involved. “They’re a way to capture the imagination of people around the world, because it becomes more than the sum of its parts.”
All these options for something to do on a summer night drew such outsize spending from consumers last quarter that the U.S. economy won’t be able to make up for it once the box offices and concert venues close at the end of this summer.
The sunset of the juggernauts
Looking at the pop culture landscape, Morgan Stanley’s gloomy forecast foresees U.S. consumer spending contracting about 0.6% next quarter. With consumer spending being the heartbeat of the services-centric American economy, the sunsetting of these juggernauts will likely have far-reaching economic implications.
Normally, live entertainment and movie theaters are a minuscule part of overall consumer spending, but this summer was so unusual and lucrative, they provided a one-off boost to the economy impossible to replace, Morgan Stanley argues. Movie theaters and live entertainment “would have to see massive swings in order to impact overall economic activity. And they have,” the note says.
Morgan Stanley estimates that Barbenheimer brought in about $900 million in box-office sales in the U.S. in July and August. Added to that is about $1.4 billion in food and beverage sales, assuming approximately $15 per person, which brings the total to a combined $2.3 billion. Foreign ticket sales—which technically count as a U.S. export—were an estimated $1 billion over the same time period. Those don’t get counted into the overall consumer spending numbers, because they’re purchased by moviegoers abroad, but they do count toward GDP.
The two musical tours had even wider effects on the broader economy. In addition to ticket prices (which don’t account for exorbitant resale prices) and concessions, concertgoers often booked hotels and flights to attend performances in prime destinations. All in all, Morgan Stanley estimated the average Taylor Swift fan spent $1,500, while Beyoncé fans spent $1,800. Together the tours generated a combined $5.4 billion in spending in the third quarter.
Now that the economic ripple effects from a historic summer for the entertainment business are coming to a close, economists will have to consider whether people will find another unexpected trend—pop culture or otherwise—on which to spend their money.