On a school night last week, at 3 o’clock in the morning the party was still going strong at Marquee, one of the best clubs in NYC.
It is also, at 10 years of age, one of the city’s oldest.
The remarkable decade-long place at the top that Marquee has enjoyed has inspired a professor at Harvard Business School to analyze it, and two scholarly papers have been published talking about it’s continuing success in a city where within a year or two, very often even the highest-grossing clubs will be shutting their doors.
“The average lifespan of Manhattan nightclubs was thought to be approximately 18 months”, the most recent of Prof. Anita Elberse’s studies states. “Of the New York City top 10 grossing clubs in March 2010, four-Plumm, Home, Pressure and Lotus- had by 2012 closed their doors”.
No problems at Marquee. At 3 a.m., still packed into bars and banquettes on two different levels were the revelers. Waiting in the cold outside still more were lined up, willing and anxious to pay a cover charge of $50 to get in on the party’s last hour. NYC nightlife was truly never like this.
In an industry always well known for fly-by-night operators and owners, Noah Tepperberg, 38, and Jason Strauss, 39, who in 2003 first opened Marquee, have not only kept alive their initial club, but have also put together one of the nation’s premier nightclub empires. In 2010, a second Marquee opened in Las Vegas, and with a first year revenue of $80 million, became the nation’s highest grossing club.
Anita Elberse, who is among the youngest professors to achieve Harvard Business School tenure, has since 2008 made a study of Marquee.
“Marquee: The Business of Nightlife”, was her initial report and it offered a highly surprising insight into the success of the club: charge plenty for booze.
As an example, it was typical for the customers to pay for a bottle of vodka that would in a liquor store out, side cost $25 as much as $350, just so they could party with the likes of the Olsen twins, George Clooney and Bono.
Even with the “bottle service” success however, revenues were on the down-slide, from 2007′s $15 million, to 2011′s $5 million. Even Elberse, who appears to look as at ease in the DJ booth at the Marquee as she appears in her official portrait in her office, was pondering whether or not she was seeing the “last call for Marquee”, which was how it was put in her original paper.
Not So Fast
While some other owners of clubs may have milked whatever they could out of Marquee and then either sold it or simply closed it, Elberse’s latest study entitled “Marquee: Reinventing the Business of Nightlife”, shows how Tepperberg and Strauss came to the conclusion that the key to the party continuing to roll-on was “focusing on star DJs.
“All of a sudden”, wrote Elberse, “a venue which had been about the sale of expensive alcohol delivered to the customer’s tables would be changed into one at least as concerned with the sale of tickets to events heavily marketed featuring up-and-coming and A-list DJs”.
In other words, a business model, similar to the sort which has allowed places such as Roseland and Webster Hall to stay in business long after their expected closing dates, was adopted. In place of live rock shows, Marquee would now focus on the DJ superstar spinning the latest electronic dance music (EDM).
In a dramatic Marquee renovation last year, one which truly raised the roof, $3.5 million was invested by Strauss and Tepperberg. Prior to the renovation, the DJ booth lay off in a corner, not only out of sight but also out of mind. The new design has the DJ front and center on the stage, and his name is proclaimed to everyone in the room via a giant, luminescent display.
Tepperberg informed the News, ” we witnessed that this EDM experience was truly blowing up, and we wagered it would in New York”.
At Marquee, DJ Chuckie is now a marquee player, flying in from his Aruba home just shortly before playing the club last week. Chuckie states that he takes over 400 flights annually, and on Twitter over one half million fans follow him.
Chuckie points out that “Owners of clubs are grasping the way to get people in the door is electronic music. The DJ is the ticket-seller, crowd-puller. We have gone from being looked at as disc jockeys to getting seen and treated as artists”.
They may be being treated as artists but they are certainly not starving like them. Star DJs such as DJ Tiesto are reported to average $250,000 nightly. Owners of clubs get what they pay for.
Vedrana Bobinac, a 23 year old student who came to the club Wednesday night said, “I would not have come to the Marquee, if it wasn’t for DJ Chuckie. I would have found a rave in Bushwick”.
You certainly do not need a Harvard degree to realize Strauss and Tepperberg were on to something-but should you be studying to get one, on Tuesday, the pair will make the trip to Harvard to lecture business students on success and how best to attain it.
One key: Adapt with the times.
“It is not the Club’s name or the neighborhood or the brand which is most important”, states Tepperberg, now a partner in ten nightclub ventures including a Sydney, Australia Marquee. “People now want to have an experience they are able to share with friends and be able to show they were in fact there”.
The most recent opening for the pair is a huge Asian lounge and restaurant called Tao Downtown. The huge room has a complete wall of tables which are elevated, a perfect setting for crowd watching.