What People Actually Spend on Entertainment & Music

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There’s an old myth about recessions – and depressions, for that matter.

It states that people spend more on entertainment and leisure during hard times, mostly to escape a difficult reality.

But the actual ‘reality’ on entertainment spending is far more complicated: even during the Great Depression, expenditures on things like movies plunged as the hard years wore on – not because people didn’t want the escape, but because they just couldn’t afford it (attendance dropped 40 percent by 1933, according to various estimates).  And over time, people sought more cost-effective or government-subsidized entertainment options, especially if they were free.

And that bears some resemblance to the current, Great Recession as well (or whatever we’re calling it these days).  Perhaps shorter-term dips are immune, but in longer downturns, hardscrabble realities come to bear.  According to stats released this week by the US Bureau of Labor Statistics, expenditures on entertainment dropped 7 percent in 2010, on top of a 5 percent drop in 2009.  As of 2010, household entertainment expenditures landed at $2,504 per household (which counts large families and bachelors alike as one).

Which, in turn, is about 5.2 percent of total expenditures.

But how much of this is music-specific?  The Bureau actually tracks a number of music-related areas, and they agreed to share some statistics with Digital Music News.  But they don’t publish more broadly on things like recordings and downloads because of larger percentage errors (based on a smaller sample size).

That said, there were some interesting trends.  Per-consumer expenditures on recordings are down roughly 50 percent since 2007 (to less than $14 per household), and broader event expenditures (sports, music, carnivals, whatever) are also slumping substantially.  The economy clearly isn’t helping those categories, but other areas – like satellite radio, downloads, and subscriptions – have actually been creeping upward.  That goes for musical instruments also, though that sector is still tumbling from a massive, 2008-year boom.