Richard D – TorontoNightclub.com
Its no secret, that the past five years, nightclubs around the world have been shuttering their doors. People have blamed changing tastes for millenials and gentrification. Whatever the case may be for people not going out anymore, venue operators can either bleed a slow death of declining margins, or evolve and give the next generation a place to spend their money.
Nightclubs located in downtown areas around the world are closing up and condos are going up in their place. Increasing property values are forcing them out and landlords are taking advantage of the increase value of the square foot of their buildings. The razor thin margins nightclubs are dealing with are already hard to deal with since international DJ’s rates spiked with the residencies offered by Las Vegas and Dubai. If they wanted to cut their costs, they could just move to the outer areas of major cities where rents are lower. But its not that easy as their are other factors at play here affecting their business model.
For years now, millenials and gen-xers have turned to their mobile phones for things nightclubs used to provide. A place to hear the latest songs that radio wasnt playing. A place to meet new people. And a place to have fun with your friends. Spotify, Tinder and online video games like Fortnite and Among Us provide all those things from the comfort of their own home. Ask any teen if they cant wait to hit a nightclub when they turn 19 and they just stare at you with a confused look on their face. Its not even on their radar. There is nothing there that interests them.
Another factor affecting the old business model of opening up a venue to have people come in and buy alcohol is the recent legalization of marijuana happening all over the world. No longer is alcohol the only legal way to lower your inhibitions and take your evening to the next level, you can now consume THC in different ways. Smoking it, eating it as a cookie or gummy bear, or drops of oil under your tongue. Nightclubs dont see a penny of this potential product for their establishments. What makes matters worse, people can consume it right before entering and it can last hours eliminating the need to buy alcohol inside the venue.
Its now 2021, nightclubs have been closed for over a year. Have they taken the time off to do some self-examination and try to come up with a new business model that will attract the next generation or will they slowly wither away by failing to evolve with the times.
Is it over?
What can be done? Is it impossible for them to make money from this model? The writing is on the wall. If they dont change, they will close. Its only a matter of time. Hopefully they’ve used the time off to brainstorm with their managers, promoters, and a group of teens to pick their brains and ask them what they can provide to get them to come out once a week when they turn 19 to their new business. Introduce a new all ages night with no alcohol and cater to them directly.
Solutions
Unless you’ve been sleeping under a rock, kids nowadays want Instagram worthy photos for their social media. Your venue should have MULTIPLE backdrops and props to give them to people. Neon sayings, murals, cool wacky furniture. Picture a Cardi B video.
Have multiple rooms or areas of your venue that people can chill and take photos with their friends. Change these OFTEN. Be original. People love being the first to post that new Instagram shot. And guess what happens next? They do the marketing for you. Clubs no longer need to be dark. Quite the opposite. Its all about visuals, easily captured with a phone camera.
The pricing model will have to change too. You’re competing with marijuana now whether you want to admit it or not. You cant rely on the profits from alcohol sales anymore. Charge a higher cover and give them an experience inside worthy of it.
Bring in influencers that resonate with the next generation. Kids nowadays are consuming their media online and on youtube. Go down the list of the highest paid youtube stars and every teen knows them. Bring them in for a photo op.
The old business model is done. After a year off hopefully your favourite nightclub will come back renewed for the next generation giving everyone some new experiences and a place to spend their limited entertainment dollars!