Jimmy’s, Schumpeter and future hopes for Durham’s night life

It was the best of times, it was the worst of times. Surely Dickens must have been referring to a night out in Jimmy’s. Busy, moist and most importantly free, the club has been a Durham staple for at least a decade. DJ Dave’s matter of fact statement that it will not be reopening for the foreseeable future made many of us shrill and some keen followers even organised a vigil. It certainly seemed like the end of an era.

What made this more intriguing was the mystery as to why it closed down. There were a few theories circulating through the grape vine, my personal favourite being that it was all a publicity stunt for DJ Dave. Of course, we’d been lucky enough to see it reopen under new ownership and, fingers crossed, in a better state.  But perhaps it would still be worth it (even if just as a walk down memory lane) to consider why Jimmy’s and businesses more generally may fail.

The first theory is very simple: that they just didn’t get enough revenue coming in due to free entry. I’m not entirely convinced by this, mainly because they’d been operating for such a long time. What I mean is that nothing changed in the last year to alter their profit structure. Most readers are probably aware that costs can be divided into fixed and variable; the former refers to costs that are usually paid in bulk and do not vary according to output produced, whilst the latter is dependent on output. For instance, the number of cleaners needed after a club night is dependent on how many people show up, but the rent paid for the premises isn’t. I don’t have enough insight into Jimmy’s history to be sure of this, but I suspect Jimmy’s own their building since they’ve been operating for so long. In fact, I would argue that it’s probably a business that’s relatively low cost. Sure, the revenue isn’t as high as Babylon’s or Players’ due to free entry, but maybe it doesn’t need to be to cover costs. They got away with it for years, so I’m finding it quite hard to believe that their overpriced Woodgates – bought by students drunk enough to last a night out in Jimmy’s – can’t keep the business running for a little longer.

The second theory is to do with health and safety issues. Anyone who’s been brave enough to go into the loos doesn’t need more convincing of this argument. Slippery floors, drunk people and mosh pits don’t mix well. It would also make some sense out of why no explanation was granted as to its shutting down. Red tape is a strong barrier to entry in many industries. What I mean by that is that industries where regulation is high are harder to operate in – due to increased costs of ensuring appropriate H&S conditions, long time spent on bureaucracy etc. This deters businesses from entering the market and the incumbent firms benefit from this. Markets with high amounts of regulation tend to have lower levels of competition and thus higher levels of profit. Jimmy’s closing down would have been a blessing for bigger, more health and safety savvy clubs in Durham.

Either way, both these theories could fall under the concept of “creative destruction” introduced by Schumpeter. The gist of it is that as innovation takes place in the economy, through a process of natural selection, the businesses lacking appropriate technology fail. This might seem a bit forced, but if we consider the scenario where Jimmy’s failed (albeit temporarily) because they failed to keep up with their competitors, creative destruction has clearly played a part in this. For instance, the social media presence of Players’ and Babylon is significantly higher. They are also clearly using product differentiation by putting on different types of nights (e.g. Monday Night Swingers, Quids in Tuesdays etc). Jimmy’s had failed to innovate their promotion strategy, nor have they taken into account the musical advancement of the last decade, still playing the same 10 songs from when it first opened.

But creative destruction is always a two-edged sword. Suppose Jimmy’s will eventually be driven out of business for real because of its failure to innovate, whilst other clubs find better, “creative” ways of gaining market share. Many of us will be hit by a wave of nostalgia at all those times we stopped for a short boogie on the way to Paddy’s (hats off to anyone lasting more than a brief 30-minute interlude in that hellscape). Singing Sweet Caroline and Country Roads off the top of our lungs while getting pushed around by rugby boys dressed in togas is a Durham experience no one should go without. We love to hate it, but a few weeks ago when it all seemed doomed, I thought about all the future freshers who will never get to bond over the cheesy music, sweaty walls and flooded loos. It’s true that something would have been destroyed.

The other side of the coin is that something new will be created. We see this constantly in the real economy, where old technologies make room for new ones. Polaroids (although going through a bit of a revival now with the hipster crowds) have been replaced by their digital counterparts. Records by CDs and later Spotify. So, there might still be hope that Jimmy’s would be eventually replaced by dare I say – an actual club? The Durham night scene is far from ideal, so maybe a bit of creative destruction is just what the city needs.

 

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