Lessons in economics from The Boss

Last night, I drove into Nashville to see Bruce Springsteen and the E Street Band perform at the Sommet Center. It was the first arena show I had been to in a good while and, while crowd-watching before the show, I noticed something that intrigued me.

Unlike the concerts of my college days in the early ‘90’s, this show wasn’t an explosion of wild t-shirts, long hair, scandalously short mini skirts, and fishnets. Instead, I saw a mostly middle-aged group of people, balding, graying, and many bulging around the middle. Most were dressed either in non-descript casual wear or business-wear straight from the office.

Thinking about this change and knowing that Bruce Springsteen is one of the biggest names in the music business, I looked up the top grossing concert tours of 2008. Here they are, according to Billboard:

1. Bon Jovi
2. Bruce Springsteen and the E Street Band
3. Madonna
4. The Police
5. Celine Dion
6. Kenny Chesney
7. Neil Diamond
8. Spice Girls
9. The Eagles
10. Rascal Flatts

Of this list of ten, 7 are most definitely bands whose appeal skews toward Baby Boomers and Generation X. Only Kenny Chesney, Spice Girls, and Rascal Flatts can claim a fan base composed largely of younger people.

This list made me think about that time honored advertising adage that the majority of ad revenue should be marketed toward the 18-35 age group. Television executives struggle to find shows that appeal to this audience because advertising revenues are higher if the 18-35 demographic is well represented.

Conventional wisdom says that 18-35 year olds have the most disposable income of any demographic group. Conventional wisdom says that, once you’ve reached the older demographics, you’ve settled down, gotten a mortgage and 2.5 kids, and no longer have the discretionary income of those younger than you.

But is conventional wisdom correct anymore? If the top ten tours of 2008 is any measure, maybe not. Concerts are not only discretionary spending, at upward of $50 per ticket, they are pretty high end discretionary spending. Yet almost all of the tours comprising the top ten are being largely funded by people who are decidedly middle-aged.

That the old conventional wisdom is no longer applicable should be no surprise to trend watching businesses. Late Baby Boomers and Generation X were the generations that created the “youth with disposable income” market. As these people age, they have foregone the traditions of their elders and continued to allow large portions of their budget toward entertainment. While youth still make up the largest portion of buyers in such industries as fashion, the entertainment industry has been bolstered by aging X’ers for a number of years.

Business owners and marketing directors would do well to attend a concert by one of the artists listed above. They would do well to look at the audience demographic and ask themselves if 18-35 is really their target market any longer. Generation X is still here and still yearns to be entertained and catered to. Businesses that tap into this market are positioned to tap into revenue streams missed by those who still swim the waters of conventional wisdom.

Photo Credit: AP Photo/Detroit News/Ricardo Thomas