A system dynamics analysis of the ‘superclub’ phenomenon in popular youth culture: 1990 - 2004

James Rhys Kearney 2006 Presentation structure:

• History UK ‘’ and scene • Factors contributing to the boom and bust ‘superclub’ reference mode of behaviour 1990 - 2004 • Influence diagram • System dynamics model • Model output • Questions Timeline

• 1977 – 1980 ‘Disco’ Era • 1980s ‘Acid House’ surfaces in the UK • 1988 ‘Second Summer of Love’ • 1990 ‘Acid House Bill’ • 1994 Criminal Justice & Public Order Act

Superclubs

In March 1995, journalist Andy Pemberton coined the term ‘superclubs’ in a small piece in Mixmag (a dance music magazine) noting how organisations such as , The , Back to Basics and Hard Times were more than just clubs. They ran DJ agencies, record labels and tours. Their distinctive logos appeared on clothing, merchandise and mix CDs. They were emerging youth brands (Garratt, 1999) Ministry of Sound

£20 million turnover in 1999 • £3.5 million from club • £12.5 million from record label • £4 million from tours, merchandising and media sponsorship Ministry of Sound

“The super DJ and the superclub game is over”

Mark Rodol Chief Executive Ministry of Sound 2003 Timeline continued…

• 1992 Nightclub market – £2.5 billion* (2003 prices) • 1996 Eradication of ‘need’ concept • 2002 ‘Rennaisance’, Midlands, closes • 2002 ‘Gatecrasher’, Sheffield, reduces nights • 2003 ‘Cream’, Liverpool, closes • 2003 Nightclub Market – £1.6 billion* *Mintel Market Research Spin-Off Merchandising (Brand Awareness) + 3. + + 4. Profits + - + Superclub Going Visiting Rate Population Per Club 1. - + 5. - -

7. + New Bar + DJ Fees Openings +

2. + New Club Average Club Openings Door Price

+ 6. Loss Period Merchandise Units Sold Av. Growth Fractional Loss Rate due Annually per Club> Factor to Average Entrance Fee

Baseline Merchandising Time to Fee Population Entrance Fee Advertising Effect as Population Overhead> Superclubs Clubs & Bars New Additions Superclubs' Loss of Average Growth Factor Allegiance Entrance Fee Club Profitability Adjustment to Av. Word of Mouth Fractional Loss Rate due Index Entrance Fee Indicator Entrance Fee Fee Increment Loss of Appeal Effect Adjustment Factor Stoppage Point Multiplier Persuasion Time Required Fee Adjustment Required Superclub Trend Desirability Profitability Index Eradication of Visiting Ratio Inital Trend Value 'Need' Concept (1996) Reduction due Average Alternatives Time to Full Affect % of On-Licensed Premises with SHCs entrance fee No.On Licensed Population going

Av. No.of Visits per Year per Clubber Annual Club Actual Visits per Annual Income Overhead From Club Baseline DJ Fee Superclubs in Club per Clubber

Av. Club Average Cash Annual DJ Fee (given Capacity Annual No.Visits Possible per Superclub Balance per Club full capacity) existence Total Income Costs and Overheads Nights Open a Year Max Fee per Competition Effect Clubber Year per Clubber> Merchandising Merchandise Creation Time R&D/Advertising Maximum No.Clubs Average £ Profit per Costs Given Investment Av. Number of Superclubs> Established Venue Costs> Superclub Merchandise Units Sold Additions Requirement Annually per Club % Cash Balance Invested in Merchandise to Units Sold per Market Delay Time Merchandise No.of % Current Market Person Superclubs Merchandise Merchandise Customer Base No.

Fractional Closure Rate Due to Loss of Profitability Rates and Level Sketch

No.of Superclubs New Superclubs Club Closures

Population Population Going Going to Other to Superclubs New Additions Superclubs' Loss of Clubs & Bars Allegiance

Average Cash Balance per Club Total Income Costs and Overheads

Average Entrance Fee Adjustment to Av. Entrance Fee Superclub population rate of new additions

Factor

Merchandising Advertising Effect as Population Function of Sales Going to Superclubs New Additions Growth Factor Positive Growth Growth Factor Av. Entrance Fee Effect Indicator Loss of Appeal Multiplier Persuasion Time Initial Smoothed Population Going to Value Concept Superclub Trend Desirability

Eradication of Reduction due Inital Trend Value 'Need' Concept to Increased (1996) Alternatives Trend Period Product Lifespan Time to Full Affect % of On-Licensed Premises with SHCs No.On Licensed

Baseline Time to Fee Entrance Fee Overhead>

Average Entrance Fee Club Profitability Adjustment to Av. Index Entrance Fee

Entrance Fee Fee Increment Adjustment Factor Stoppage Point Required Fee Adjustment to Maintain Profitability Required Profitability Index Visiting Ratio Superclub Population with Gains & Losses in Attendance 1 M people 600,000 people/yr

500,000 people 300,000 people/yr

0 people 0 people/yr 1990 1992 1994 1996 1998 2000 2002 2004 Time (Year)

Population Going to Superclubs : Run 1 people New Additions : Run 1 people/yr Superclubs' Loss of Allegiance : Run 1 people/yr DJ Fee and Income Factors 4 M £/(yr*club) 60 £/visit 40 clubs 6 M £/club

0 £/(yr*club) 0 £/visit 0 clubs -6 M £/club 1990 1992 1994 1996 1998 2000 2002 2004 Time (Year)

"Annual DJ Fee (given full capacity)" : Run 1 £/(yr*club) Average Entrance Fee : Run 1 £/visit "No.of Superclubs" : Run 1 clubs Average Cash Balance per Club : Run 1 £/club DJ Fee Policy Experimentation

Population Going to Superclubs 4 M

3 M

2 M

1 M

0 1990 1992 1994 1996 1998 2000 2002 2004 Time (Year)

Population Going to Superclubs : Run 4 people Population Going to Superclubs : Run 3 people Population Going to Superclubs : Run 2 people Population Going to Superclubs : Run 1 people Further Model Development

• Decline in Superclub venues not isolated within whole nightclub industry – Increased competition due to changing licensing laws • Introduction 24 hour licensing laws • Resurgence of ‘’ in recent times – Macro-media influence • Subculture development with strong fashion affect Conclusion

• Legislation against ‘rave’ movement led to sizeable potential market for Superclubs contributing towards ‘boom and bust’ reference mode of behaviour • Changes in licensing laws led to highly competitive night-time economy • Carrying capacity of system eroded by an elite group of DJs whom exploited there position as the ‘must have’ commodity (example of a ‘tragedy of the commons’)