The night is still young: Tokyo's club scene pulses with recession-beating energy.

<at>Cover Story</at>

IT'S 5 AM ON A Saturday morning and up to 1,000 people are continuing to dance ecstatically inside the sprawling concrete bunker in Shibuya, Central Tokyo. This is Womb, a four-level, subterranean super-club where big name, highly paid foreign DJs whip an electric crowd of 20- to 35-year-old students, workers, musicians, actors, models, fashionista and other brazenly beautiful people into a rhythmic frenzy under the biggest mirror ball in the country. The scene is about music, about dancing, about expression and letting go of workweek inhibitions. It's also the scene of a rapidly expanding, brand-based market niche.

Womb and the plethora of dance clubs that have risen from the ashes of Japan's crippling economic recession are the sites of a fertile new market, incubators for a potentially huge marketing demographic. People who go to clubs tend to be young, single, have good jobs (it costs up to [yen] 6,000 just to get into a Tokyo club) and spend a lot more money on clothes, cosmetics, alcohol, cigarettes and electronics than mom or dad would dream of doing. For every new club forming part of the conspicuous nightlife boom that has swept Tokyo in the last decade, there is another sponsor. Another corporation willing to spend big money to have its name associated with the cause celebre of club culture: freedom.

Tokyo's nightclub industry has undergone staggering growth since its birth a little more than 10 years ago amid the wreckage of Japan's burst economic bubble. At the time, the city had only two or three dedicated dance clubs and was still a town ruled by karaoke. But today, Tokyo is the Asian hub of the inter national club scene. Takashi Ishihara, CEO of Cluberria, a Tokyo club culture Web site (www.otaiweb.com/top/hp/clubberia.htm), says the expansion of the club industry has been exponential over the last two or three years. In Shibuya ward alone, up to 20 nightclubs have opened in that brief time span, including a lot of smaller bar/DJ venues that are forming the grassroots of the scene. Meanwhile, the opening of the 3,000-capacity Ageha "super-club" in Shin Kiba last December drove clubland's inevitable spread to the suburbs. One-off club nights at other far-flung venues like Chiba's 10,000-capacity Makuhari Messe, Odaiba's Differ Ariake and Zepp Tokyo predate this trend.

Popular foreign DJs can earn [yen] 5-10 million for a night in a packed Tokyo club. Even at the smaller clubs, DJs who were getting $1,000 a night 10 years ago are now demanding and getting five or six times that amount. That compares very favorably with major European cities, including London, still considered ground zero of the worldwide clubbing scene. Hard statistics are hazy due to the underground and clandestine nature of an industry long associated with drug use, illegal opening hours and sketchy safety standards (witness the stampede in an after-hours Chicago dance club in mid-February that killed 21 people and the inferno days later at a Rhode Island nightspot that left 99 dead.) still, it is generally acknowledged that a DJ playing a London super club such as the Ministry of Sound will have a pay scale that peaks at around 10-15,000 pounds (about [yen] 1.9-2.8 million) for a few hours in the DJ booth.

At Womb, the cost to put on the 2003 Countdown Party, featuring big name American and Swedish DJs Richie Hawtin and Sven Vath, was over [yen] 10 billion, according to Sabi Takahashi, the club's head producer. Cluberria's Ishihara says the market in Japan will continue to grow, while American clubs, which have started to slump in recent years due to restrictions and police crackdowns, are not as likely to sustain the big paychecks.

Club Inc.

Tokyo's rise to prominence as a second home for the DJ jet set was confirmed when AgeHa, now probably Tokyo's biggest club, opened with great fanfare and a lineup of world-class DJ talent last Christmas. AgeHa is the beachhead of a new club concept in Tokyo modeled on the synergy between corporate marketing and underground culture. Owned by Yasuhide Uno, the young, progressive, technology-savvy chairman of Usen, Japan's biggest digital radio network, AgeHa was created as a means to dictate music trends and to garner actual radio content from music played in the club. "This is exactly the sort of deal that we always hoped we would make as our company went forward," says a Usen source. "Uno has already built what he describes as the fastest fiber Net access cable network in Japan, and he has major record labels, including Sony and Avex, firmly locked in as content providers. "The whole idea behind Usen was to provide content, so we knew that we had to make deals with the leading creative influences in Japan." The Usen service includes 440 channels of music and WebTV. "Taken together," the source adds, "this brings us closer to providing the total service we were looking for when we became the very center of youth culture."

This New Year's, AgeHa featured New York house maestro Danny Teraglia, one of the world's most coveted DJs, in what Ishihara claims was a major coup (and undoubtedly a very expensive one).

Usen's understanding of the emerging nexus between underground club culture and mainstream music trends was initially taken up by Avex, now Japan's biggest record company, when in the mid-1990s it bought one of Tokyo's most influential dance clubs, Velfarre. Opened in December 1994 as a de facto replacement for Juliana's, the most famous club in Tokyo at the time, Velfarre soon became the testing ground for Avex's increasing efforts to fuse dance music with the more orthodox, but tiring, J pop sound. As a result, J pop super starlets including Namie Amuro and Ayumi Hamasaki started appearing at the club, where they featured their now famous "trance" remixes. The strategy has worked, and Avex is bringing in a big part of its multibillion-yen revenues from dance music spawned at the Velfarre nightclub.

Though entertainment industries tend to do well during hard economic times, the invigoration of the nightclub scene in Tokyo has not happened by default, with fashion and music, clubbing defines a new urban, underground consciousness that has been evolving globally with disco, hip-hop and house music since the late 1970s. But in Tokyo, a delicate confluence of cultural, economic, technological and even political factors have made the city fertile soil for a peculiarly corporate club industry that is pressing into the mainstream.

While it is technically illegal in Tokyo for people to dance after 1 am, city police turn a blind eye to these activities, and some Tokyo clubs stay open till 10 in the morning. In New York and many European cities, most clubs are forced to adhere to a strict 4 am closing time. The loose application of the law in Tokyo, along with irregular zoning regulations, has allowed nightclubs to spring up in every unoccupied furrow of the city, notes Laymont Raymond, a club promoter in Tokyo for over 10 years. Raymond recalls the days before the boom, when there were no longer any legal clubs in Tokyo. "The big clubs, Yellow and Gold, had both been closed down by the police because dancing past 12:00 am [the extra hour was added only last year] was illegal, and there was a big police crackdown," he says. His promotion company, In Action, "started having all night events in event spaces, which is legal. By organizing private parties, we were able to find a loophole in the law."

Ishihara says the increasingly lax application of the law is related to Japan's unique "compromise" culture of tatemae (principle) and honne (reality) a point confirmed by Raymond. "Most clubs have good relationships with the police--they pay off the police or operate as event spaces so they do not fall under the category of a club," he says, adding that "most event spaces and clubs are now built in areas where people don't live to avoid noise problems."

Cool hunters

For the most part, the Tokyo club scene is being built by well-educated, bilingual 20-somethings who understand how the fusion of fashion, technology and music works. Womb's Takahashi, for instance, is a 28-year-old advertising graduate from New York University (NYU) who is generating big business out of what he calls a "total" club concept. As a student at NYU, Takahashi started to organize multimedia "showcase" events with big Japanese fashion companies like Issey Miyake at the city's major clubs. Under the moniker Far East Technology, he conceived the idea of combining fashion, music and technology under one roof during the 1999 New York Spring Fashion Collection in Chelsea's Twilo, then New York's biggest nightclub. That club, a forerunner to Exit, was closed down by former Mayor Rudolph Guiliani's conservative brigade in the late 1990s. Takahashi pooled resources and money from Sony, which used the event to promote its just launched Aibo robot-dog, Issey Miyake and Japanese superstar DJ Ken Ishii to create a hip multimedia event. Over 2,000 people packed the club, and Takahashi hasn't looked back since.

After running a monthly party at Twilo, Takahashi was approached by the management of Womb, which was struggling to find a visionary concept of its own. "They were attracting about 150 people a night at that point," Takahashi recalls. "Now over 1,000 people are coming to the club on Fridays and Saturdays." The reason for the shift, says co-producer Takeo Yatabe, is that "we made a culture out of the club scene."

This culture embodies not only a night out dancing, but a complete urban lifestyle, including everything from what people drink, wear, listen to, think and shampoo their hair with in the morning. The concept was arguably first given life by the London club Ministry of Sound, which today refers to its club concept as a "dance brand." Its interests range from nightclubs--including its recently opened venue in Bangkok--to record production, magazines and festivals. In 2001, 3i, Europe's leading venture capitalist, invested 24 million pounds in this "dance brand."

In Japan, Takahashi has been able to sell this brand concept to Calvin Klein, Nike, Sony, liquor and cigarette companies, and others. These interests form a conspicuous presence in the club scene by sponsoring special promotions, getting their logos on all club publicity, or providing exclusive brands of beer and vodka. As a result, Takahashi has been able to spend more money on big name DJs, better lighting, promotion, decor and so on. This has been important in ensuring that Japan's fastidious, demanding and impatient youth generation are willing to buy into the culture and concepts.

Under the name Form, Takahashi and Yatabe have leveraged off Womb to expand into a "cool consultancy." In the parlance of Naomi Klein, author of the bible on corporate branding, No Logo, they are "cool hunters" who are giving corporate Japan direct access to a murky underground inhabited by a highly sought-after market demographic that could deliver explosive growth. Cluberria's Ishihara predicts that the Tokyo club industry will double its growth in the very near future.

Liquor and cigarette companies initially started to push their products to Japan's club generation about give years ago, when new legislation banned them from advertising to people under 20. Since you have to be over 20 to legally enter a club in Japan, clubs become the perfect forum for legitimate advertising to young people. (Advertisers know, of course, that many people under 20 are habitual clubbers who can easily get into the venues). Ishihara calls it a "closed world," a guaranteed market of self-selected consumers. Indeed, the rapid rise of tobacco sponsorship in clubs and bars since the 1990s globally has been well documented. Corporate sponsorship started conspicuously in Japan in 1996, notes Ishihara, when Grammy award-winning producer and DJ Little Louis Vega received an unprecedented [yen] 3 million from Gordon's Gin to spin his magic in a Tokyo club.

Though corporate sponsorship has long been a part of Europe's more established club scene, many European clubs are now actually moving in on Tokyo to grab a slice of the city's lucrative dance market. Recently, veteran London super-club Slinky took over an existing six-level venue called Cube in Tokyo's Tamachi district for three months, touting an international DJ lineup and the prerequisite high-profile sponsorship from a major cigarette brand.

Free yourself

Underlying the continuing club boom in Tokyo are shifting cultural attitudes among the young, an accompaniment to the prolonged recessional economics in Japan. Related in part to their disillusionment with the ascetic life of familial obligations and arduous employment, young people are working less, living off their parents at home longer, having a family later, and determined to become part of a global leisure culture by spending a good part of their highly disposable income on clubs and fashion. In a strongly group-based society, dance clubs have become an important means for Japanese people to start to express themselves individually, notes Yoko Ichikawa of Space Lab Yellow. What you wear and how you dance count in a club. "Many Japanese people once preferred karaoke to clubbing," she says, citing the now-declining group sing-along industry in which companies oncc entertained. In the 1990s, Ichikawa used to hang out at Gold in Tokyo's Shibaura neighborhood, but Gold and its competitors used to he considered very eccentric and were definitely "not for everyone," she recalls. "The same small group of people was everywhere."

That has changed. Now nightclubs provide a vibrant forum in which Japanese people can expand their global horizons and express, or at least discover, their unique personalities. What was once a niche-oriented, underground club scene financed by small-scale independent investors is today a rapidly growing corporate domain, a lucrative empire being built on a synthesis of music, fashion, international product branding and multinational record sales. In Tokyo, the party's only just begun.

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28 YEAR-OLD SABI Takahashi, who earned a degree in advertising from New York University, became head producer of Shibuya's Womb nightclub in March of 2000. He quickly rose to the top of his trade, generating big business with what he calls a "total" club concept.

Takahashi met his Womb co-producer, Takeo Yatabe, in New York in the late 1990s. Yatabe was studying for a business degree at Baruch College, but found the time after-hours to join Takahashi in staging multimedia parties at Twilo, which at the time was New York's biggest and hippest nightclub.

While working as an intern with the Hokuhodo Advertising Agency--the second largest in Japan--during his final year at NYU, Takahashi came up with the idea of using club culture to promote leading edge Japanese fashion and technology brands, including Sony, Issey Miyake and Final Home. He successfully promoted this club marketing concept at Twilo during the 1999 New York Spring Fashion Collection, and went on to become the first Japanese producer of regular nights at the Manhattan club.

In New York, Takahashi also became a de facto agent for state-of-the-art Phazon sound systems. He negotiated the installation of a Phazon system at Womb, and was then approached by Womb management to run its nightly operations.

In three short years, Takahashi and Yatabe have not only turned Womb into the one of the most popular dance clubs in Tokyo, but they have also established a new ground zero for youth culture marketing. Targeting pichimasu (between mass and underground) culture, the Womb producers developed a marketing consultancy--Form, Inc--which is attracting the giants of corporate Japan by giving them access to a cutting-edge market demographic: urban youth.

"We create concepts. That's our real job," says Yatabe. "Nike [sponsors at the 2002 soccer World Cup] wanted us to do a release party at Womb outside of their agency, because the agency doesn't know what young people think or want. We combined sneakers with music and software [called 'Life' photo cinema] that won a design award." Life is now being further developed in collaboration with Apple Computers and was showcased at Womb's Tokyo Technology Culture Party at the end of March. At the event, techno kids rubbed shoulders with the chairman of Apple Japan.

With companies from Calvin Klein to Kool, the cigarette brand, paying in excess of [yen] 10 million to sponsor a night at Womb, Takahashi and Yatabe are not only providing corporations exposure in the club, but are also giving them a detailed PR strategy. Womb's audience, for instance, complete detailed questionnaires each night about their habits and preferences--which means clients get access to invaluable market research.

Bringing Japanese clubs into line with their more established counterparts in Europe in the US has demanded what Takahashi calls "quality control." This extends to the sound system, the world class DJ line-up and Womb's art director, who has worked with everyone from Christian Dior to Louis Vuitton and Burberry.

"We were the first club in Tokyo to employ a professional art director," says Takahashi. Like the rest of the multimedia cast of fashion, music and technology experts contributing to Womb's total club concept, Womb's art director, Kei Nihongi, is "very cool and totally professional," notes Takahashi.

For all their marketing savvy and business acumen, Takahashi and Yatabe's success is largely attributable to the fact that they understand the rudiments of the global club sound. Both are musicians who remix and produce records--under the name, Tech Riders and thus have been able to understand how to meld the subtleties of underground music culture with corporate market imperatives.

"Through being DJs and producers, we make networks and meet other DJs and musicians; it's more natural," says Yatabe. "We can approach artists as musicians rather than conventional businessmen. They can relate to us." With their international educations in business and advertising, Takahashi and Yatabe are in a unique position to fully exploit an emerging nexus between dance music culture and corporate marketing. They say that their total club concept is still in its infancy--but you can already see the flashing strobes at the end of the tunnel.

STUART BRAUN (The Night is still Young, page 22) is from Sydney, Australia, and has been an editor and freelance writer in Japan for almost three years. He has written about popular culture, travel, economics and the environment for Blueprint and Qantas. He holds a PhD in History. In Tokyo, he can be roared after hours behind a drum kit in the city's bars and clubs.