Last week Dutch news agencies reported within ten years nightclubs will have disappeared. This might come as a shock to many, but it makes total sense. According to research, it’s the financial crisis and smoking ban to blame. Nightclubs themselves can’t be blamed. It’s not their fault teenagers have less money to spend.
The primary function of nightclubs is (1) provide entertainment, (2) a place to hang out with friends and (3) meet new people. During the past years the way we’re entertained and hang out with people changed (think Facebook, Twitter). That is why nightclubs, if they don’t change, will disappear within years. They continue to lose relevance in our ever changing digital world. Instead of putting blame on others (financial crisis, smoking ban), they should review and change their business model. Which in turn will change the function of a nightclub all together.
Luckily for nightclubs, their situation is not unique. We could compare their situation with the music business or major television networks which both face a decline. Instead, I choose to compare nightclubs with movie theaters. They compare well on three important topics;
1. Main product (movie > DJ / live band)
2. Venue (movie theater > nightclub)
3. Technology (3D, large screen > powerful audio system, light shows)
Several years ago movie theaters struggled to stay open. Why pay money to watch a movie elswhere while you can watch it at home? People were not interested in leaving their house for just a bigger screen, which was essentially the only difference between home and a movie theater. Movie theaters had to change their business model. Which is what they did and continue to do.
1. Main product (movie)
Every movie theater needs a great product, which is the movie. Audiences are less interested in movies starring expensive actors. Instead, they are more interested in unique stories and/or a movie utilizing the most awesome technologies (think Avatar, Harry Potter, Alice in Wonderland, Toy Story 3).
2. Venue (movie theater)
According to George Lucas’ book Blockbusting, the most frequented theatrical venues were megaplexes averaging sixteen screens. “These megaplexes were destination locations complete with food courts, video games and shopping.” Why megaplexes? People demand choices. A wide choice of movies (“sixteen screens”), a wide choice of restaurants (“food courts”), et cetera. They don’t visit a movie theater for ‘just a movie’. They want the full package – On a side note, I won’t be surprised if “video games”, described in the book Blockbusting, will be replaced by social networking lounges – In essence, a movie theater turns in an entertainment venue with movies as their killer-app.
3. Technology (3D, IMAX)
2D no longer suffices. Most new movies are made in 3D. And screens are getting larger. IMAX, movie theaters with the largest screens, went mainstream. About ten new IMAX venues open every month. A movie in 3D and/or IMAX is an experience instead of ‘just a movie’.
As a result of this changed business model, moviegoing showed an increase in both box office returns and attendance. What can nightclubs learn from this development? Well, first of all it is important to acknowledge the fact people continue to love music and hang out together. Just as with movies, they still love the product. But this is no longer enough to attract people to visit nightclubs.
1 Nightclubs need to focus on a product everyone wants to see. Could be a famous DJ or unique live band. Without a great product, people won’t be interested in nightclubs. No matter what they try.
2 The venue needs to offer a full range of entertainment. Several dance floors, multiple bars, a restaurant, several lounge areas and maybe other functions, like a gym. Also some quiet areas (without music) are needed. Those areas feature comfortable sofa’s, a bar, free wifi and big tv’s.
3 It’s all about technology. Nightclubs should give their customers the most unique experience possible. Imagine a club with the biggest and/or most spectacular light show of the country, a fully lit dance floor or maybe a movie theater like auditorium but instead of chairs, there’s a dance floor or a restaurant. Imagine watching a movie while dancing or having dinner. How cool would that be!
Without changing the function of the nightclub, people won’t be interested in going there anymore. For club owners, the solution involves the complete package, ranging from product to venue to technology. And remember; it’s not about the music, meeting other people or about the drinks. It’s about the experience!