The Limited Local Benefits of Swiftonomics

By Philip Khor

April 2024 FEATURE
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TAYLOR SWIFT, the queen of pop, transcends the realm of music. She is a cultural force, a brand powerhouse and—according to Swifties in political leadership—a significant economic driver. Her relatable lyrics, narrative-driven albums and social media engagement create a sense of community and shared experience.

Her fervent fanbase translates into dedicated concertgoers, enthusiastic merchandise buyers and a loyal consumer base that fuels Swiftonomics— the Taylor Swift effect on the economies of cities and local businesses she holds concerts in.

Intriguingly, Taylor Swift’s critically acclaimed Eras Tour has sparked bad blood within ASEAN. Leaders across Thailand and the Philippines have criticised Singapore for entering an agreement with Swift’s team to host concerts exclusively in Southeast Asia. Uncharacteristically, Malaysia’s traditionally concert-averse conservative bloc has joined the Swiftian gold rush, with Bersatu leader, Sasha Lyna Abdul Latiff, asking the Anwar administration to explain the outcome of past negotiations between the Malaysian government and Taylor Swift’s team during the Ismail Sabri administration.

ASEAN leaders wish Taylor Swift would schedule a concert in their respective countries, not purely out of fear of missing out (FOMO). The Eras Tour is the first tour to gross over USD 1 billion globally, and its companion concert film, “Taylor Swift: The Eras Tour”, took in USD261 million to become the highest-grossing concert film, more than doubling the previous record held by “Justin Bieber: Never Say Never” in 2011. The US leg of the Eras Tour generated USD4.6bil in direct consumer spending on expenses, including tickets, outfits, merchandise, food and beverages and travel, according to QuestionPro estimates. At the same time, Economic Effects NET named the Eras Tour Japan’s biggest-ever music event by economic impact, generating USD229.6mil across four Tokyo shows. Even so, Nobel laureate, Paul Krugman, wonders out loud, why doesn’t Taylor Swift earn more than she does?

Look What You Made Singapore Do

Beyond short-term gains, Singapore bets on the Eras Tour and other mega-events to improve its allure for global entertainment acts, riding on the back of pent-up global demand following the relaxation of Covid-19 public health restrictions. While the island-state may lack home-grown cultural credentials, it is not for lack of trying. In 2012, Gallup ranked Singaporeans as the most emotionless people globally. Now graced by the likes of Bruno Mars, Coldplay and Ed Sheeran, Singapore is banking on the halo effect of these artistes to rehabilitate its image as Asia’s “events and entertainment capital”.

The appeal of mega-events has historically been a double-edged sword. World leaders’ pleas for Taylor Swift’s patronage echo the race for Olympic host nations in not-too-distant memory. Concerns about environmental impact, fuelled by Taylor Swift’s sizable carbon footprint from private jet travel, loom large. Estimates for 2022—during which Taylor Swift was not touring—suggest that her private jet travel produced a whopping 8,300 tonnes of carbon emissions, equivalent to that from 1,800 (average) human beings in a year.

Moreover, it is unclear how the benefits of a Taylor Swift tour stop will be distributed within local communities. Matherson (2004) argues that businesses reap the lion’s share of the profits from mega-events, which are unlikely to recirculate in the economy. Further, KPMG estimates that of the just over AUD100mil profit that Taylor Swift is to earn from the Australian leg of the Eras Tour, the net impact of the tour on the Australian economy would be just a tenth of that: AUD10.6mil, equivalent to 0.002% of Australia’s quarterly gross domestic product (GDP).

I Knew You Were Trouble (Taylor’s Version?)

Back home, concert enthusiasts in Malaysia have endured disappointment after disappointment. With Malaysia’s reputation for shutting down concerts in response to protests over performers’ stage wear, the Eras Tour snub comes on the heels of opposition to Coldplay’s November 2023 Malaysia show over their support for gender diversity.

Former Minister of Youth and Sports, Syed Saddiq, characterised the cancellation of Malaysian Coldplay tour dates as the country missing “an economic lottery”, citing substantial spill-overs in the transport and food and beverages sector. Likewise, the Arts, Live Festival and Events Association lamented the impact of protests on “our international business environment and reputation”, citing the “millions in tourist income and benefit hotels, transportation, food and beverage, retail and more” that resulted from Coldplay’s six sold-out shows in Singapore.

The uncertain business environment this has brought about bodes poorly for the local entertainment industry. Singapore’s successful efforts in ensuring a Swift landing must be viewed in light of its historical disadvantage in home-grown talent, in which Malaysia arguably has the upper hand. However, multiple factors in Malaysia threaten to suppress local cultural dynamics— and the allure of dominant international acts such as Taylor Swift overshadows the real problems faced by local Malaysian artists, constrained as they are by shifting goalposts.

It is of little comfort that much of the purported spill-over effects of mega-events are more often than not, an exaggeration. Economically, Malaysia has little to lose beyond the creative economy, which contributes just under 2% of GDP (2019), if it resists the Taylor Swift FOMO plaguing the ASEAN region. For any administration in power, the uncertain economic benefits are not worth incurring confrontation from religious fundamentalists. The prospect of Malaysia becoming a regional destination for megastars, as Singapore aspires to be, is politically unfeasible.

Shake It Off

It is crucial to remember the uncertain economic benefits of mega-events—these will likely have a limited trickle-down effect, with businesses often reaping the lion’s share of profits.

Instead of chasing fleeting trends, Malaysia should foster its own rich cultural tapestry. By supporting and empowering local artists and creating a stable and inclusive environment for the arts to flourish, Malaysia can carve its unique niche in the region’s cultural landscape; one that transcends the allure of international megastars.

Philip Khor

is a Visiting Data Scientist at Penang Institute with a background in financial sector regulatory modeling, technical writing and enterprise data science training. His interests include labour and health economics, the ethics of artificial intelligence and climate policy.