Funflation: spectacles become more expensive than bread

Funflation: spectacles become more expensive than bread
Funflation: spectacles become more expensive than bread

The increased prices of cinema and theater tickets are not a problem, but they will indirectly prevent us from accepting the euro

This summer, in addition to the record heat, people were also unpleasantly surprised by the excessively high prices of everything they pay for entertainment, culture and, in general, for their free time.

The cinema, as the most popular cultural activity, became extremely expensive. A ticket for an adult for a screening of a full-length film on the weekend, which cost BGN 8 before the pandemic, is now BGN 15, i.e. has almost doubled in price.

Night clubs have introduced something like an entrance fee – from BGN 10-15 for the more ordinary ones to BGN 25 for the more luxurious ones. This money does not include any consumption, rather the fee is a way to limit the flow a bit.

And try to buy a ticket for the sensational new production of the National Theater “Ivan Vazov” “The Hague” in November and you will find that

the best seats on the ground floor cost BGN 100 each.

And they are already done for the performance on November 14th. The situation is the same with “Hashes”, never mind that the show has been performed for the second decade.

Or try to get injured for the traditional New Year’s gala concert at the Sofia Opera – BGN 130 are the most expensive tickets, and BGN 50 are the cheapest.

And if you want to take your child to see the ballet “The Nutcracker” at Christmas, you will have to pay BGN 80 for the best seats on the ground floor or first balcony. If you find it’s because they’re running out too.

Tickets for Lili Ivanova’s concerts on December 15 and 16 in hall 1 of the National Palace of Culture cost from BGN 90 to BGN 300. But there are not many unsold.

It’s the same with sporting events. Tickets for “Gerena” matches are ten percent more expensive than last year’s. Yes, it’s true that they don’t cost as much as the ones for the NBA tour in Paris, which are 250 euros each. They are only 15-20 BGN each, but for many ardent football fans, that is a lot. It’s not that they don’t pay. For Stiliyan Petrov’s charity match at the “Vasil Levski” stadium at the end of August, the tickets cost between 60 and 90 BGN. And the most expensive ones were bought first – for the boxes. In sectors B and D, where the seats were 60 BGN each, there were unoccupied ones here and there. All these are not just observations. The statistics also captured an incredibly large rise in leisure spending.

If until last summer the main driver of inflation in Bulgaria was fuel and energy prices, and in winter – food, this summer it is pumped mostly by entertainment, sports and culture, which

have increased in price by 7.5% in July alone

And somewhat from the hotels and restaurants, whose services rose during the same time by 2.9%.

In comparison, food prices increased by only 0.1%. In other words, bread goes up in price less than spectacles. In the USA, where the situation is the same, the term “funflation” was even born from the English word for fun and inflation. And it turned out that there are people who are ready to take out a loan, but go to the desired concert.

The leisure expenses of a Bulgarian, which were 72 BGN per person last summer, are now 100 BGN, i.e. the increase is 50%.

“My explanation is that it was summer, and much of the entertainment is related to that season. If we look at annual spending, we will see that last summer there was still some increase in the share of entertainment spending, but not that big. Because in 2022, inflation was rising rapidly and peaked in September. Certainly, many Bulgarians then postponed their summer vacation or spent it more modestly. In other words, they have withheld these expenses, which they are now releasing,” says Adrian Nikolov, an economist from the Institute for Market Economy.

But why are they going up so much?

Economists call such goods and services elastic because with them even small changes in demand and supply have a large effect on price. These are usually things that are not essential and not vital.

For example, a fan of Taylor Swift, if the singer came to perform a concert in Bulgaria, would pay 500 BGN for a ticket, without thinking about how this would affect his personal finances. Tickets for another star – Ed Sheeran, who is coming to our country in August next year, are BGN 300 each, but literally minutes after they were released online, the virtual queue reached 100 thousand people.

For example, gasoline, bread and electricity are inelastic. Even if a liter of fuel costs BGN 3, the consumer has nowhere to go. He will continue to charge his car. It’s the same with medication. Therefore, in general, the prices of such goods have always been more closely monitored by governments, and some of them are even regulated. When he can’t, political dramas arise, such as where we will find money to compensate for the fuel for the citizens if its price exceeds BGN 3.

This is not the case with books, cinema, theater or sports tickets. If an event generates enough interest, surely its organizers will make the most of it. However, seats in each hall or stadium are limited.

And there is definitely no lack of interest

NSI data on the number of tickets sold show that this sector of the economy has almost escaped the pandemic crisis, which hit the entertainment industry very hard.

In 2018, for example, the number of theater tickets sold was 1.2 million, in 2019 it rose to 1.3 million, only to fall during the pandemic in 2020 to 371 thousand.

But a recovery followed, and in 2022 tickets sold for drama theaters were already 844 thousand. In 2023, they will surely pass 1 million again.

The same applies, albeit on a different scale, to tickets for pop and rock concerts, opera, ballet, folklore, symphony concerts, etc. (see the infographic).

Figures for movie tickets sold show the same. Something even more curious has happened to cinemas – the post-pandemic rush of people for entertainment seems to have revived them for a new life. While in 2019 we had 74 cinemas with a total of 237 screens, during the pandemic they decreased to 70 cinemas with 215 screens. But in the next two years they opened new ones

there are currently more movie theaters in our country than before the pandemic – 85.

In principle, cinema distribution is entirely market based and is very indicative of demand setting prices.

There was, of course, nothing to prevent movie distributors from being a little more modest, because movies don’t have a fixed price after all.

A Bulgarian importer buys the tape significantly cheaper than a French one, for example. Studios set the price based on how many people would potentially watch it in that country.

The same principle applies to stage production licenses when there is an unexpired copyright. They cost differently for each country and depend on the local public’s ability to pay.

In general, the rise in the cost of entertainment may not be a big deal, but ironically right now

Bulgaria has the least need for this

Because the price criterion for entering the Eurozone is not measured according to the Bulgarian methodology for inflation, but according to the harmonized index. However, it is justified by the richer consumption of the Eurozone countries.

In it, the relative weight of entertainment is 8%, while in Bulgaria they have only a 5% share. In our country, food has a weight of 31% in the measurement of inflation, but according to the harmonized index it is only 25%.

And when inflation is pulled from food and fuel to entertainment, it plays a bad joke. The difference between 5% and 8% may not seem like much, but right now every hundredth of a percent counts for us to accept the euro.

The article is in bulgaria

Tags: Funflation spectacles expensive bread


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