Proximity to Cool
All around us, we are paying for access to cool. That “cool” factor can be exclusivity, power or just an established brand. Concert tickets are priced higher as the seats get closer to the performer. So paying more for content that already has a track record is a well established business concept.
Melvin Simon’s obituary in the NY Times talks about how the mega founder of Simon Property pioneered the landscape of modern malls. Postwar Americans with new cars in new suburbs were eager to drive somewhere to spend their money. He turned cornfields into strip malls and added movie theaters into shopping centers.
He also developed the modern mall operator’s business model that attracts big anchor tenants like department stores by charging them less rent. Signing a prestigious anchor even before construction gave banks the confidence to finance much or all of the development. Then charge smaller adjacent stores proportionately more. And require stores to pay a premium over basic rent if their sales exceed a certain level.