What people spend money on has changed over time. Trends in percentages of total personal consumption expenditure (PCE) spent in certain categories from 1980-2018 are plotted below1.
Though expenditure on clothing and food has declined, spending on entertainment and medical services has increased. Below is the graph of changes in percentage of disposable income spent on recreation from 1929-2018.
Here’s how percentage of total recreation expenditure on certain entertainment categories (like movies, newspapers, music, live entertainment, sports etc) has changed over time.
The prices of tickets (to movies, concerts, theatre etc) has increased sharply in comparison to the increase in prices of the average basket of goods as represented by the Consumer Price Index (CPI), which is valued at 100 in 1983 in the graph below.
Here’s how the percentage of total expenditure spent on sports, live entertainment, and movies has changed from 1929 to 2018. There is a noticeable increase in the spending on live entertainment and sports since 1989. Increasingly, there is more money for an artist in touring than in streaming.
Effects of impactful events on PCE
Napster’s introduction destroyed consumer spending on CDs. This impact can be seen in the graph showcasing spending on CDs over time below.
Trends in unit spending on audio assets are summarised well in the graph below. Introduction of new technologies has decimated the sales of prior technologies. Streaming services dampened the sales of digital albums starting 2012, for instance.
Broadcasting
The graph below showcases how money and assets flow in the TV industry.
Below is a table listing the advertising expenditure (in $ billions) in selected categories. There’s a stark contrast between the decline of print and the ascent of digital. There is a decrease in ad spending through local means.
The advertising expenditure has influence on personal consumption expenditure in fuzzy ways. Pursuantly, advertisers often adapt to the channels frequented by consumers.
References:
1. Vogel, Entertainment Industry Economics
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Quite a relevant article in the present times!!
This has great insights and quite useful for relevant industries to develop their product strategy and in many more ways. This is equally useful to attune personal preferences and focus to optimise long term cost and efforts .
It shows that ppl are spending for entertainment at the cost of food and clothing. Also among the entertainment, live ent and sports are gaining popularity. Findings of study are very interesting. The data used is for any particular region or across the countries?
The data is from USA.