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Hello and welcome you are 
listening to Patrick Boyle on 

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Finance, a podcast exploring 
ideas from quantitative finance,

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examining events occurring in 
markets right now and financial 

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history to see what lessons can 
be taken away, including 

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interviews with some of the most
interesting people in the world 

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of finance. 
To learn more about the podcast,

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visit on finance.org. 
In the battle against inflation,

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some new villains have emerged. 
Beyoncé and Taylor Swift, or Tay

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Tay as she's known on this 
channel, Higher interest rates 

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are supposed to reduce the 
demand for goods and services, 

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especially discretionary goods. 
Both the US Federal Reserve and 

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the ECB have been raising rates 
quite aggressively of late, and 

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they both hiked interest rates 
once again this week. 

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US rates are now at the highest 
level in 22 years and European 

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rates are at their record high, 
matching the level they reached 

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in 2001 when the ECB was trying 
to boost the value of the newly 

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launched euro. 
So why, after a series of 

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interest rate hikes and a surge 
in the price of essential goods 

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like food and energy, are we 
seeing Taylor Swift's latest 

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tour break records? 
And Beyoncé stand accused of 

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boosting the entire nation of 
Sweden's inflation rate during 

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her two night stay in Stockholm 
this May. 

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Beyonce's world tour, her first 
solo tour in seven years, kicked

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off this May in Stockholm and 
fans from around the world took 

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advantage of the attractive 
exchange rate and flew in to buy

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tickets that worked out cheaper 
in Sweden than in the United 

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States or Britain at the time. 
The type of ticket that would 

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have cost $2000 in the United 
States was going for around 

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$200.00 in Stockholm. 
So Beyoncé fans known as the 

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Beyhive flew to Sweden booking 
up hotels and restaurants. 

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Leading to the Beyoncé Blip, 
fans allegedly booked up every 

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hotel room for 40 miles around 
the concert venue. 

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The country's CPI hit 9.7% that 
month, which was higher than 

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expected, and the local 
economist announced that Beyoncé

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was responsible. 
That's right. 

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Beyoncé stands accused of 
inflicting economic hardship on 

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the people of Sweden. 
Bruce Springsteen, Elton John, 

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Harry Styles and Ed Sheeran are 
all embarking on major tours 

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this year, with 1,000,000 
rushing to see the shows, even 

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if the tickets, travel and 
accommodation are very 

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expensive. 
Taylor Swift fans, or Swifties 

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as they're known, are expected 
to spend around $600 million on 

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tickets for her current U.S. 
tour, which, while a big number,

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is a small portion of overall 
U.S. consumer spending. 

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American consumers spent almost 
$7 trillion over an equivalent 

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period last year. 
A lot of that most likely went 

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on those huge water bottles that
they carry everywhere. 

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But music tours are a big 
business, but not that big when 

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you look at overall consumer 
spending. 

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So do Superstar tours really 
spur inflation? 

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And if that is the case, should 
they be stopped for the good of 

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humanity? 
Well, some people feel that it 

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should. 
Tay Tay is putting on six shows 

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in Singapore next March. 
These are her only dates in 

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Southeast Asia and demand is 
very high. 

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Singapore's education Minister 
was inundated with requests for 

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an ad hoc school holiday for the
dates of the tour, but he 

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refused this in case the 
concerts fueled further 

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inflation. 
Minister Chan explained that he 

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had to refuse because he was 
concerned about how fans of 

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other music acts that were 
visiting Singapore such as. 

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Coldplay, amongst others, would 
feel if the Ministry of 

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Education acceded to the school 
holiday request from Swifties. 

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I would imagine that most people
would actually request an 

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additional day of work or school
to give them an excuse to avoid 

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attending a Coldplay concert. 
But maybe that's just me. 

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I mean, come on, Coldplay. 
Economists are used to digging 

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through what many would consider
fairly dull data to try and 

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understand what's going on in 
the global economy. 

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And when they feel that Beyoncé 
is not getting the treatment 

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that she deserves, they 
sometimes jump to her defense, 

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not unlike Kanye West. 
And as Kanye West would probably

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tell you, a badly timed defense 
of Beyoncé can come off as an 

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attack on Taylor Swift. 
Anyhow, analysts from Credit 

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Sites, a research firm, compared
hotels revenue per available 

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room for the stops on Tay Tay's 
current tour to the average for 

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EU S's top 25 markets. 
On those show dates, they found 

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what they have named the T Swift
Lift. 

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The chart on screen shows the 
spike in revenue per available 

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room for the dates of Tay Tay's 
concert in Nashville, TN. 

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Nashville's hotel revenues per 
available room Morton doubled 

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from the same period the prior 
year. 

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The chart on screen right now 
shows the size of the T Swift 

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lift for the different cities 
played on her tour, and the pop 

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in Nashville is the most 
extreme. 

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Cities like New York, Boston, 
and Las Vegas had much more 

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muted reactions. 
They may simply be better able 

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to handle big events like a 
Taylor Swift concert. 

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But it's also worth noting that 
Tay Tay got her start in 

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Nashville and considers it her 
hometown, so fans might have 

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been more excited to see her 
play Nashville than any other 

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city. 
Credit sites even found one 

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hotel executive in their 
research who estimated that the 

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Swifties would boost room 
revenues for the hotel by 1% for

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the entire year. 
So big events like this are 

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helping the hospitality industry
in the towns they visit. 

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But does this mean that they're 
inflationary? 

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Well, inflation is calculated 
from the change in prices of a 

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basket of goods. 
In the United States, the BLS 

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record the prices of around 
80,000 items each month. 

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Data on rents is gathered from 
around 50,000 landlords and 

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tenants. 
The CPIU, which is the consumer 

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Price index for all urban 
consumers, is the most widely 

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cited inflation metric in the 
United States. 

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But it's not the only version of
the CPI being calculated. 

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The basket of goods and services
is supposed to represent a 

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scientifically selected sample 
of the prices paid by consumers 

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for goods and services purchased
at a given point in time. 

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The items sampled and their 
weights in the overall index are

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determined by the Consumer 
Expenditure Survey, which is 

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carried out for the BLS by the 
Census Bureau. 

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There are a number of other 
inflation statistics also being 

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calculated, such as Chained CPI,
which aims to reflect how 

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consumers alter their buying 
patterns in response to changes 

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in relative prices. 
For example, they might buy more

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chicken if beef becomes more 
expansive. 

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Concerts and hotel rooms are in 
the basket of goods being 

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measured. 
But they have such a lightweight

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that national inflation 
shouldn't be expected to jump as

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a result of a single event 
unless it's on a huge scale. 

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A spike in hotel room rates near
a big event caused by a surge in

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demand might often be offset by 
a fall in costs elsewhere. 

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A hotel far away from the event 
might see a dip in demand over a

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big concert weekend and lower 
room rates to attract customers.

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Additionally, fans who spend a 
large amount on a Taylor Swift 

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concert ticket are likely to cut
costs on other items, bringing 

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down demand and, in theory, 
prices for those goods for a 

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short time. 
In my last video on whether the 

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luxury goods bubble is bursting,
I mentioned that wealthy 

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Americans appear to have 
switched from spending money on 

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branded fashion goods and are 
instead spending more on travel 

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and holidays. 
Since that video, LVMH reported 

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what is described as a 
surprising drop in U.S. sales 

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this Tuesday. 
As its chief financial officer 

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said, aspirational customers are
not shopping as much as they 

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used to. 
It might be that their target 

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customers spent their disposable
income on Taylor Swift tickets 

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rather than on a new outfit or 
handbag. 

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Smaller countries like Sweden or
Singapore might see a surge in 

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demand when there's a big event.
But they don't need to worry 

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about inflation being driven by 
a Beyoncé or Taylor Swift or 

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even a Coldplay concert. 
Thousands of Swifties are 

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members of the Beyhive. 
Might be likely to fly in from 

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neighboring countries and boost 
the local economy for a few days

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that the concert is on. 
This additional demand is likely

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to temporarily push up hotel 
prices or make it difficult to 

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get a table at popular 
restaurants. 

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Locals might spend some of their
savings too, money that they 

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won't be spending in the future 
until their finances recover. 

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James Pomeroy, an economist at 
HSBC, pointed out that while the

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month on month 8.7% increase in 
Swedish accommodation costs in 

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May fits with the general 
Beyoncé explanation, the cost of

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food package, holidays and pets 
nationally in Sweden were also 

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to blame for the high annual 
figures. 

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So while Beyoncé may have caused
a shock to 1 month's data, she 

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is not the reason for inflation 
in Sweden being well above the 

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central bank's target. 
Any negative economic effects 

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that people might be worried 
about in such situations will 

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usually be short lived. 
When Swifty's return to their 

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homes. 
Prices near the concert venue 

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can be expected to fall. 
Hotels can't charge Swifty in 

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rates once the event is over. 
In fact, the inflation rate 

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might even look a little bit 
lower the following month until 

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people's savings recover. 
So despite what you may have 

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read in the press, tours are 
probably not something central 

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bankers should worry too much 
about. 

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So why have concert tickets 
become so expensive in recent 

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years? 
The BBC reports that average 

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ticket prices for big arena gigs
have more than doubled since the

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late 1990s. 
Well, ever since music streaming

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replaced CD sales, the amount of
income that artists and 

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performers receive from their 
songs has fallen considerably. 

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Because of this loss of income, 
musicians have had to switch to 

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making most of their money from 
concerts, which means that 

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ticket prices have gone up. 
The musicians aren't trying to 

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take advantage of their 
audiences. 

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It's just that historically, a 
tour was viewed as a way to 

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boost record or CD sales, while 
today it's the main source of 

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income for a musician or band. 
You get to listen to the music 

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online for free, but if you want
to see it live, it's more 

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expensive. 
The average cost to see Taylor 

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Swift is $254 per ticket today 
because live performance has 

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become a musician's main source 
of income. 

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They're focusing much more on 
putting on great shows today. 

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The shows that you attend today 
are much more professional than 

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they were in the past, with 
better sound, better lighting, 

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and better venues. 
All of this costs a lot of 

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money. 
Today's musicians play fewer 

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small venues than they used to. 
One reason for this is the 

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competition to stage bigger and 
better shows. 

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This is possibly why Taytay has 
decided to perform her only 

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Southeast Asia dates in 
Singapore. 

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Moving expensive stage sets 
around is riskier and more 

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expensive than playing multiple 
times at the same venue if the 

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demand is there. 
The ticket industry has become 

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more of a monopoly over time, 
pushing up prices. 

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And because ticket sales have 
moved online, scalpers have been

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able to buy up tickets in a way 
they couldn't in the past to 

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resell them at a premium to 
music fans. 

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To combat this, ticket sellers 
have moved to a dynamic pricing 

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model where prices rise and fall
with demand. 

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This can seem unfair to music 
fans, but it really just means 

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that the price premium that 
people are willing to pay is 

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going into the pocket of the 
artists rather than the ticket 

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scalpers. 
The economics of live music may 

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be changing a lot, but that 
probably shouldn't keep central 

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bankers awake at night. 
Thanks for tuning in for this 

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week's podcast. 
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