Coldplay’s concerts in Ahmedabad and Mumbai have made headlines, with the Ahmedabad show reportedly attracting a record-breaking 1.34 lakh fans. This record surpasses previous performances by Diljit Dosanjh and Justin Bieber, which had drawn crowds of nearly 50,000 each. Prime Minister Narendra Modi also weighed in, pointing out that the growing popularity of concerts in India underscores the nation’s potential for hosting global live events. Modi emphasized that both the state and private sectors should focus on building the necessary infrastructure to support this expanding market, which can drive tourism and create jobs.
A Record-Breaking Concert Economy
The Coldplay concerts in India have been a huge success, particularly in terms of attendance. The Ahmedabad concert attracted 1.34 lakh fans, marking a new high for live events in the country. This success is seen as part of India’s growing concert economy, which draws international artists and encourages local infrastructure development. The surge in concert attendance is in line with an increasing demand for live entertainment, especially for premium experiences. However, this surge in concert participation presents a paradox when viewed against the broader economic context in India.
India’s Slowing Economic Growth
While the concert economy thrives, India’s broader economy has been facing challenges. The country’s economic growth slowed to 5.4% in the July-September quarter, marking a seven-quarter low. Analysts had expected growth to exceed 7%, leading the Reserve Bank of India (RBI) to revise its forecast for 2024-25 down to 6.6%. At the same time, private consumption expenditure also dropped, from 7.4% in the first quarter to 6% in the second. This slowdown in consumption is particularly evident in urban areas, where high inflation and elevated borrowing costs have strained household budgets. Despite the strong performance in the concert sector, many urban consumers are cutting back on spending in other areas, particularly on mass-priced products.
The Contradiction in Consumption
The current economic situation in India reflects two opposing trends in consumption. On one hand, demand for premium goods such as luxury clothing, electronics, and concert tickets remains robust, even in the face of a slowing economy. Companies like Hindustan Unilever (HUL), Diageo India, and Reliance Retail have reported growth in premium segments, with consumers opting for smaller, higher-priced packages to manage their spending. On the other hand, there is a noticeable decline in demand for everyday goods in the lower- and mid-priced categories. This has been linked to inflation, which continues to affect the affordability of basic necessities, leading to a drop in sales for mass-market products.
HUL’s recent earnings performance highlighted the underlying economic tensions. Although the company saw a 19% year-on-year increase in net profit, it was largely driven by a one-time gain from the sale of its Pureit business. Sales growth was just 2% year-on-year, and volume growth remained flat. The company also noted a continued decline in urban consumption, although rural consumption is beginning to recover.
Concerts as Economic Stimuli
Despite the slowing economy, the surge in concert attendance highlights the economic potential of the live events sector. According to a recent Bank of Baroda report, the direct and indirect spending from major concerts like Coldplay’s will likely contribute between Rs 1,600 and 2,000 crore to the economy over the span of two to three months. This includes spending in sectors such as hospitality, transportation, and retail, which will see significant growth as a result of the concert-related influx of tourists and attendees.
The concert economy also creates a positive feedback loop for other sectors. Tax revenues from GST on ticket sales, hotel bookings, and restaurant expenditures are expected to increase. Additionally, the events help support the gig economy, providing jobs and opportunities for a wide range of service providers.
A Paradox of Economic Growth
Coldplay’s concerts in India exemplify a complex economic paradox. While the concert sector booms, offering significant economic benefits and creating jobs, other sectors, particularly in urban areas, are facing challenges. High inflation, increased borrowing costs, and slower income growth are leading consumers to scale back on everyday purchases, even as they continue to splurge on premium experiences like concerts. This contradiction underscores the complex nature of India’s current economic landscape, where pockets of growth exist even amid broader economic challenges.
As the concert economy continues to expand, it remains to be seen how other sectors of the economy will adapt to this changing landscape. However, it is clear that live entertainment will continue to play a significant role in India’s economic future, with potential for both growth and deeper economic contradictions.
