25 Sep 2013
Posted by admin 
OOver the past few years there have been whispers that New York City nightlife is in a down period and in need of change. More and more, people find the vibrant party scenes of Las Vegas or South Beach worth the pilgrimage. To be clear, New York has always been and will always be the nightlife epicenter of the world. However, the rise of the global mega-DJ has disrupted its flow. For the most part, seeing one of these wildly popular heavyweights play in NYC means buying tickets to an arena concert, risking the elements at an outdoor festival, going to a large club like Pacha or enduring some sort of odd ballroom setting like Roseland. Each has issues:
- Arena concert – The arena concert experience is what it is – a concert experience, not a nightclub experience. Draft beer and hot dogs versus dance floors and hot bods.
- Outdoor Festival – A fun experience but one quite different from a night out at a club. Teenagers abound. No need to address Bloomberg’s recent decision to shut down Electric Zoo. It’s also hot as hell and definitely not the place to show off those pricy Italian shoes you just purchased.
- Large format club – Larger New York clubs like Pacha primarily concern themselves with filling up space and thus have a less cutthroat door policy. This generally leads to VIP clientele feeling maltreated and repressed.
- Ballroom – Places like Roseland close a lot earlier than nightclubs like the newly opened VIP Room. They also lack the clandestine vibe of smaller clubs. In fact, many grant ages 18 & up access, making it close to impossible for anyone of legal drinking age to forget they’re of legal drinking age.
The occasional mega-DJ bookings like the recent Tiesto appearance at Provocateur during New York Fashion Week or Afrojack playing Cielo under his real name – Nick van de Wall – have been epic. Also, the good men of the Tao Group (owners of Marquee, Avenue, Lavo and PHD to name a few) book big time DJs at Lavo every once in a while (and now Marquee, but more on that in a bit). For the most part though, instances like this run scarce in New York.
Tiesto playing in a nightclub the size of Provocateur is a real treat for New Yorkers.
Atlantic City remains the best “local” option to quiet the bass-thumping beast. The club at Revel – HQ – books big names on a regular basis. This summer they had Armin van Buuren, Kaskade, EC Twins, Bambi, Laidback Luke and many others.
Why this scarcity issue? Just like most things in this world, it comes down to one thing – money. As ADANAI has discussed before, mega-DJs get paid megabucks. In order to afford the megabucks, club operators have to sell lots of $500 bottles of Grey Goose and Dom Pérignon. To sell lots of bottles, a club needs lots of tables (as well as a wealthy clientele). To have lots of tables, clubs need something that is hard to come by in Manhattan – space. Most of the hot New York clubs have always been small by national standards. Lavo NYC is 6,000 square feet while the one in Las Vegas is 20,000 square feet (dwarfed further by places like XS in Las Vegas at 40,000 square feet and Marquee in Las Vegas at a whopping 60,000 square feet). New York real estate is just too expensive to profitably open a club of that size. In addition, filling a club of that size on a regular basis is a difficult feat (let alone filling it with a cool crowd).
Digging deeper, here are some other interesting numbers.
Top tier DJ talent can charge anywhere from $50,000 to $250,000 per night depending on the night and the venue. Tiesto, Kaskade, Avicii, Calvin Harris and Deadmau5, to name a few, are able to charge at the high end of that range.
The average local NYC DJ earns in the $500 – $3,000 range depending. Let’s assume $2,000 for this analysis. Let’s also assume the average mega-DJ takes a location discount and charges $50,000.
Therefore, a club owner needs to generate an incremental $48,000 in revenue to break even. Put cover charge aside since most NYC clubs don’t charge a cover (and patrons would probably revolt if they did). A club like 1Oak has around 25 tables so approximately $2,000 more per table is needed to make the numbers work. If the average table spend on a sold out night is $2,000 (pre-tax and tip), now it has to double to $4,000.
With the cost of bottles at around $500/bottle, that amounts to four extra bottles per table. While many people love these DJs, it is too risky for the club to take a chance with jacked up prices especially when people can take their business elsewhere for the night, enjoy themselves and spend thousands less. As a comparison point, massive clubs like XS in Vegas have close to 200 (170 to be exact) tables making it easier to justify the extra expense (big talent is actually a must to ensure the cavernous clubs make capacity).
Now that you’ve been brought up to speed, here’s the main point. Marquee New York reopened earlier this year after a renovation and it has become the pre-eminent place for DJ talent in New York. To date, they have hosted the likes of Tiesto, David Guetta, Dash Berlin and Laidback Luke. Six main reasons contribute to why Marquee can financially make this work:
Three years ago most in New York couldn’t name the person in the DJ Booth. Now many times they not only can name him, they would recognize him walking down the street.
1) The space is large enough to accommodate an economically acceptable number of tables.
2) Marquee has always had a cover charge (Wass or Rich signaling the dreaded go to the left command made grown men quiver in yesteryears) so selling tickets comes as no shock to their clientele.
3) The layout works well for nights when the DJ is the main event. The stage is elevated and visible from everywhere in the club, even the upstairs tables.
4) The club operators’ Rolodex overflows with big-ticket customers’ personal information leaving low revenue promoter tables scarce.
5) Marquee has long since earned its stripes and the brand name attracts top tier talent.
6) The Tao Group network of clubs (Marquee, Lavo, PHD and Avenue in NYC; Marquee, Tao and Lavo in Las Vegas) allows them to get better pricing through bundling and longer-term contracts requiring the DJs play at various venues throughout their network.
New Yorkers have become so accustomed to not seeing the mega DJs that when told someone like David Guetta is playing Marquee, there is a level of disbelief. While the intimate, highly curated club should always be the cornerstone of New York club life, the mega DJ night as a real option on a regular basis adds to its multifariousness.
