September 1st, 2010 is already here and where does the world of nightlife and hospitality stand? This week I received an email from Brian Gordon of Miami Marketing Group (MMG) with a link to an article entitled “Dolphins SoBe Style.” The article outlines how Miami Marketing Group, the proprietors of LIV Nightclub, are clearing out 400 seats and 17 suites of Dolphins Stadium with new owner Steve Ross, to bring South Beach nightlife to the NFL. The space will be complete with table service, dance floor, and DJ booth, as well as models, celebrities, and some of the biggest DJs in the world. The ownership made a multi-year commitment because, according to team CEO Mike Dee, “We want to see it grow and build. Starting with two prime-time night games we think will be red hot from day one.” Additionally Dee is quoted as saying, “A lot of times teams design around a lounge or space, but in this case this is a more cutting edge project because we are talking more about the experience, the vibe. And why we partnered with these guys is because they bring the rest of the equation, the vibe, the programming, the celebrities, the feeling that you get when you go to LIV.” They have a stadium and franchise worth hundreds of millions of dollars, and the thing they want is the “feeling” you get from LIV—quite the complement.
With this in mind, I would like to take this, my last column prior to my departure on holiday, to point out to everyone and anyone who will listen, that nightlife is becoming the leading source of entertainment in the world. The Miami Dolphins deal (similar to the Hyde Lounge at the Staples Center in LA) is an incredible idea that I believe we will see duplicated throughout the world with sporting events and stadiums. It is a prime example of how nightlife culture, is being assimilated into every part of the modern entertainment business. The culture and business of the night has exploded out of the backroom and into the boardroom. An educated person cannot argue the profound effect that nightlife has had on our culture in the modern era (post 1970). The culture and business of the night pervades all areas of our day-to-day life from music and art to hotels and advertising/marketing. We have gone from an underground counter-cultural movement, to a multi-billion dollar industry controlling the tastes and employment of millions of people. Let’s go to the videotape.
Well this one is sort of easy. Ian Schrager created the boutique hotel with partner Steve Rubell during the ‘80s. They combined the design, art, music, and marketing they learned in nightlife and revolutionized the hotel experience. Enter W Hotels, Andre Balazs, Thompson Hotels, Kimpton Hotels, Ace Hotels, SLS Hotels, and so many more its hard to name; and we arrive at today. Marriot Hotels, the largest US hotel owner, has partnered with Schrager to develop Edition Hotels. "We're interested in getting into the market as fast as we can and with as many as we can," Marriott Chief Executive J.W. "Bill" Marriott said of the boutique segment in a recent interview. Boutique Hotels can charge 12% more on average than other properties on the same market for providing nothing more than design and “experience,” both of which can, in most cases, be provided at little or no additional cost. There are currently 55 W Hotels and Resorts around the world, which have been developed since 1998, and this trend is quickly seeping into residential real estate. Enough said.
Casinos are, in my mind, the modern day precursor to the development of the nightlife industry. They were, for the most part, shady operations until the late 1970s. Once corporate America realized how much money was being made, they took over, cleaned up, and made it into one of the biggest industries in the world. Is nightlife so different? Are there many businesses where you can make 20-30% profit on a drink or 150% profit on a bottle and charge a cover for access? We’ll leave it to the precursors, the casinos, to be the first to realize how much money there was in nightlife. We can argue that New York or Miami is the nightlife capital of the country, but the truth is Las Vegas is where the real scratch is made. From daytime pool parties to vibe dining restaurants to nightclubs, Las Vegas spends the most building the venues and makes the most profit from them. I don’t know the exact figures, but there is no way that nightlife isn’t a top 10 driver of visitation to Las Vegas (reason people visit). From what I am told, it is one of the only things keeping the city afloat as hotel and gaming revenues decrease. As Rande Gerber said, “When times are good people drink, but when times are bad they drink even more.” Who am I to argue with Cindy Crawford?
All of the other critics may complain, but the writing is on the wall. Why aren’t there any restaurants to review in New York? Because people in New York, although they want great food, would prefer good and consistent food with some action. I am not saying that this is the correct approach, but the modern diner seems to be so much more about the overall experience than just the food. That is why bistros, brassieres, trattorias, wine bars, and cocktail lounges dominate the dining front. Yes, there are some exceptions such as Momofuku or Aldea, but for the most part people want to get drunk, listen to great music, be in a warm environment, meet the opposite sex, and eat salty, but not overly filling foods. Who did this? Sorry to say, but nightlife guys. Stephen Starr of Buddakan, Marc Packer of Tao, Sam Nazarian of every restaurant in Los Angeles, the Meatball Shop guys, Jeffrey Chodorow of China Grill Management, Richie Notar of Nobu, Bagatelle Group, George V (Buddha Bar/Barrio Latino); they all have roots in the world of nightlife and vibe dining. The modern restaurant business is not profitable unless you can do a few things: sell liquor, bring in the customers, create energy, and generate BUZZ. Vibe and experience dining came out of the lessons learned from the world of nightlife. Abe & Arthurs, Kenmare, The Lion, Gemma, Griffou: they are good restaurants to eat in, but they are great restaurants to drink in.
Art, Music & Fashion:
Universal Music Group/Interscope reached out to my business partner a few years ago about a new artist they were trying to break. She had a new single and wanted to do some free shows at nightclubs in Manhattan. Josh set her up at Tenjune and the Hamptons Magazine party at Mansion. Her name: Lady Gaga. Look through pictures of Studio 54, Max’s Kansas City, Mudd Club, and Palladium. Andy Warhol, Halston, Michael Jackson, Keith Haring, Basquiat, Mick Jagger, Barishnakov, Diana Ross, Julian Schnabel, Truman Capote, Betsey Johnson, David Bowie, Lou Reed, Ross Bleckner, Vincent Gallo, and so many more. Fast forward to our generation and the regulars include Jay-Z, Beyoncé, Lady Gaga, Damien Hirst, Zack Posen, Marc Jacobs, Julian Schnabel, Heidi Klum, Britney Spears, Giselle, the Olson Twins, Axl Rose, Katy Perry… the list goes on and on.
The bottom line is that music, art, and fashion (whether the artist, designer, or musician are in the club or not) are inexorably influenced by what goes on within the club and in the surrounding culture. Creativity finds a home within this world and the primary adopters of trends come from clubs, bars, and live music shows in the downtowns of cities all over the world. Having the privilege of living in the modern world’s version of Rome while it descends, I can say without question that creativity is spewing voraciously from nightlife. The current creative developments from nightlife culture are only beginning to show, and will have effects on Art, Music, and Fashion for decades to come.
Marketing & Advertising:
Can you remember the last time you purchased something because you really loved the advertisement? You saw the billboard as you drove from the Hamptons to Manhattan, and you just knew there was no way you could live without that new perfume. Yes, Apple has incredible commercials, but without the incredible product and “cool” factor, it is all just a Newton (the original iPad). Advertising is a dead model. Without layering in integrated marketing such as social networking, email campaigns, events, and product sampling, and engaging the consumer in their world through experiential programs, it is useless. Who are the first people to utilize new technologies to market their products? Street marketers, nightclubs, the people who need low-cost solutions to reach large amounts of people. We were the first to use email blasts, Facebook, MySpace, street teams, PR stunts, YouTube, whatever new technologies and ideas that come out of the digital revolution. We are the ones testing the effectiveness for corporate America. After that, corporate America hires us to teach them and execute for them. Companies like Relevant, Mirrorball, and Strategic Group along with countless others, are creating strategies and executing them for the biggest companies in the world. Want your product to be cool? Instead of waiting in front of the velvet rope outside our clubs, line up outside our offices.
Employment, Families & Education:
Finally, countless families are supported and young people are educated through the money earned from the nightlife industry. Our industry, in New York alone, has an estimated $9.7 billion in economic activity, $2.6 billion in earnings (primarily wages) and 95,500 jobs in New York City. That’s just New York City. The total box office revenue for movies in the United States and Canada in 2009, a record year, was approximately $10 billion.
Despite all of the incredible accomplishments I have listed above, there are still some dark sides to the world of nightlife. Many young lives have been crushed because they couldn’t handle the temptation that surrounds the world. Easy access to drugs, sex, and liquor for many people can lead to a lifelong struggle with addiction and depression, not to mention it plays havoc on relationships. For all of the incredible things that came out of nightlife and its freedoms, as with anything in life, lessons were learned and the bills for fun and excess are constantly being collected.
For all of those issues, the truth is that an industry filled with PR people has a PR problem. Headline-loving politicians and absentee parents exacerbate the negatives, but the truth is that all businesses have negative aspects. I know just as many people in finance and real estate with drug and drinking problems as I do in nightlife, and the problem doesn’t go away just because the clubs go away. People like their freedom and if it isn’t in the club, they will find it somewhere else. The real problem lies in the human condition.
"Seven Deadly Sins
Wealth without work
Pleasure without conscience
Science without humanity
Knowledge without character
Politics without principle
Commerce without morality
Worship without sacrifice."
— Mahatma Gandhi
Whether you are partying or working this Labor Day, hold your head high, and drink a toast to being part of an incredible industry. Keep dreaming and see you this fall at Cocktail Hour, where more often than not one drink turns into ten and no one knows where and when the night will end.