Economy Vs. Entertainment…Does the current condition of the Economy have an effect on the Entertainment Market?
by Raakin Iqbal
As we know the USA Economy is going through some really hard falls backs. All the major industries are going through hard times such as Steel, Information Technology, Car Manufacturing, and the most commonly known, Real Estate. People assume that the only industry that has no effect to the bad economy and high gas prices is the ‘Entertainment Planning Industry’ in which they are wrong!
A while back I was at this business networking meeting where C.E.O’s from different company backgrounds would discuss how the current condition of the economy was effecting there business. As the lecture’s were over, members would gather in there small social circles and discuss other things (you know the typical social circles). Well in the group of people whom I was with started talking about ways how they are down sizing, cutting costs, and make ends meet for some of them and when I am about to give my input, one of the guys says
“Raakin, What do you know? Your in the entertainment industry. The only industry which is still making it big! regardless of this chaos that is taking place.”
I stooped. Was in a way offended to a certain degree. I replied back to that fine gentleman,
“No not really. Major parts of the entertainment industry has its effects as well. People are spending less in there event management gigs and cost of production is raising. In way, our industry is going almost going through the same effects as your industry (IT) is.”
He didn’t even say a word back.
To better elaborate on that. I will take this into 2 aspects I specialize in.
1.) Event Planning/Production/Management- As you know, my main line of profession is event management/planning/production. Basically people hire me and I locate the venue, arrange Sound/Lighting/Effects, Work with food/beverage vendors and maintain a theme.
Because of the cost of good has risen (seriously Milk was 1.99 in my childhood time and now its $3.89!). Like the last food vendor I worked with charged me approximately $9.00 per head for a group of 200 with 3 courses and 6 dishes + 3 Dessert Choices back in 2007. Now because there cost of purchasing the food has nearly doubled and gas is so expensive (May I suggest a Smart Car? Anyone). So delivery is double its cost. Just recently I had called the same guy (Who I have 2 1/2 year relationship with and have given him over 19 food contracts) for a quote for nearly as the same amount as the example stated previously above gave me a quote of $15.00 per head. Same set up, everything! I 1st thought that it was a practical prank on me, but he wasn’t joking
So because of all of this, clients are spending less on there events. Like the typical $15,000 to $21,000 wedding arrangements I would get back in 2006-2007. Now the typical contract for management and planning I am receiving are $4000-$70000 on average. So for a business to make dreams and hopes to a reality (part of our business model) is being a little expensive.
2.) Concert Production- Like as if you don’t know, as a side hobby I produce concerts and tours through out the United States. Just a side gig, hobby, eh for the fun of it.
Companies now are creating small budgets, laying off employees (Bank of America is laying off 6500 people and 5 some percent of there mortgage dept), and cutting cost. Companies are sponsoring less into concerts and tours. Like for instant, Coca Cola sponsored back in 2001 about/around $200K into American Idol and less say 2008 was the “1st season” of American Idol, they wouldn’t give no more than $75K. So its a great decrees. Event producers like me who just doesn’t focus on mainstream USA acts but also the international acts. By meaning flying performers across the Atlantic Ocean. Airline tickets are atleast $1900 per ticket/Round trip. And yes the GAS has an effect on us as well. People are not attending concerts and events these days due to the high surcharge in gas we have to spend to fill “em up”.
So now “Mr. Gentleman”. Do you see, we are much in the pot as much as you?