The Association of Licensed Multiple Retailers (ALMR) was thrust full square into the media limelight the other day after it issued some statistics to the effect that half the UK’s nightclubs had closed over the past decade. It said that there were now 1,733 clubs around the country, compared to 3,144 in 2005, warning that a continuation of the trend would leave Britain worse off “culturally, socially and economically”.

The revelation not only sparked off a plethora of all too predictable headlines about the music stopping or the lights going out (guilty, M’Lud), but it also set off a heated debate about why exactly the traditional British nightclub has fallen on such hard times.

Inevitably, the answer is not a simple one. One of the main factors highlighted by the ALMR itself was the “overly restrictive planning laws and tax levies”. Specifically, the surge in new town-centre residential development meant more people were now complaining about noise levels and disturbances, prompting even long-established licences to be restricted or revoked.

Another related factor cited was the way clubs often breathe new life and help regenerate rundown areas, only to find themselves squeezed out when more businesses then move in and the local authority decides to take a heavy hand to the threat of antisocial behaviour.

Those are certainly factors, but I’m not sure I’d have them at the top of my own list. My top three would be the perfect storm of the smoking ban, the recession and the new licensing laws.

What’s done the most damage

So which has been the most damaging? Tricky question, as a case could be made for all three. The surge in new late licences for high-street pubs and bars has certainly taken its toll, killing off the traditional “chucking-out” time trade that local “hops” and discos relied on to keep the tills ringing. Instead of having to turf out still-thirsty customers at 11, pubs and bars now turn down the lights and crank up the music to prevent punters from dashing off to the nearest nightclub. These chameleon bars have stolen the traditional sub 1,000-capacity nightclub’s bread and butter business.

Although the recession didn’t really start until late 2008, for the licensed trade the economic downturn had effectively been triggered the previous year when the smoking ban came in. At any rate, a combination of the two was devastating to nightclubs and pubs and bars alike as people stopped going out as frequently in favour of drinking at home - and even when they did go out they spent less as they took to pre-loading on cheap supermarket booze.

One aspect of the recession that had a disproportionate impact on nightclubs was the heavy skewing of job losses to the 18-25 age group that the late-night market has traditionally relied on.

All of which hit the weaker players in particular, forcing them to defer investment in their clubs, thus putting them at a disadvantage to those operators that continued to keep their clubs in good order. As these clubs became tired looking, so the clubbers that were still going out went elsewhere, heaping even more pressure on their finances and eventually tipping them over the edge in the opposite of a virtuous circle.

Another recent factor has been the imposition of university tuition fees, which have eaten into the spare cash of Britain’s already hard pressed student population, even taking a big bite out of the traditional booze and frolics fest that is freshers’ week.

The impact of all this negativity is there for all to see. According to research by IBISWorld, total revenue for the nightclub industry has declined by almost a quarter since the start of 2011 to £2bn this year and is forecast to fall by another 3.2% next year.

Turning off the investment tap

The demise of so many venues has, ironically, made life easier for those that are still going, among them Deltic Group, itself rescued from the ashes of the old Luminar Group. Chief executive Peter Marks insists that his company is “living proof that there is a future for well-run, well-invested nightclubs”. Which goes back to my point about the consequences of a turning off of the tap of investment.

Not that investment alone is enough in some locations, as Mr Marks concedes. He points to a concentration of closures in towns and cities in the economically challenged north and midlands, many of which had become “mini Detroits” during the recession. “We’ve shut clubs in Rotherham, Bolton, Blackburn and Burnley in the past couple of years,” he says. “We didn’t want to shut them, but nobody was going out. It wasn’t that we were losing trade to the pubs, because they were closing too.”

If the nightclub industry’s woes were largely due to the economic downturn, it should follow that, as consumer confidence gradually improves, they should be enjoying a consequent improvement in trading. So why is there little sign of that happening?

My view is that by far the biggest threat is posed by the tectonic shift in the way young people live their lives, specifically their leisure time. They may go clubbing very occasionally, but the concept of going to the same local club every week and listening to the same music is anathema is to an audience brought up on Spotify, Pandora and Deezer and used to creating their own eclectic playlists from the comfort of their own homes.

By the same token, when they do go out, young people want the sort of exciting and differentiated experiences they can share with friends on Facebook and Instagram. In some cases, this could mean going to one of the big destination clubs set over several floors that still offer a compelling night of dancing and entertainment. In others, it could mean a cheap flight to Ibiza, Barcelona or Prague for a hedonistic weekend that can be captured on a smartphone and plastered all over social media.

Then again, it could mean going to one of the myriad music festivals that are mushrooming across the country. By some estimates, there were more than 70 festivals last summer, up from fewer than 10 a decade ago. Again, just the sort of experience to shout about to friends and family – even more so as dodgy burger vans are replaced with good quality cuisine of every hue and type, from Asian street food to Mexican, sushi and all points between (not to mention a craft espresso bar).

The die-hards might point to the centuries-old role of drinking and dancing in the boy-meets-girl equation as a lasting draw. But even here tradition is being turned on its head as pulling websites like Tinder come to the fore.

To my mind, this fundamental shift in the way people lead their lives threatens to finish off what the smoking ban, the recession and licensing changes had started. I hope I’m wrong, but unless something dramatic happens, we really could be lamenting the day the music died.

Dominic Walsh is business reporter at The Times covering leisure, tobacco and drinks industries

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