The questions have to be asked ........ Who are the customers? Who are the intended customers?
As I see it Day & Night has been built for the "Tourist", not the resident. It is geared to attract those who want to spend their holiday money on drink, girls & having a "Good" time.
Udon is not Pattaya, it is not Patong, or Chaweng or Bangkok, it is a rural city, some 500 or so miles from the seaside, it doesn't have palaces, or an international sports stadium, or any other MAJOR tourist attraction.
As Udon's tourist trade relies heavily on a small percentage of the available tourists making the journey "up North", to see where the new girlfriends family come from, or those "backpacker types" who want to see the "Real" Thailand, it must follow that, if there is a national slump in tourism, Udon will be affected (1% of 1m is far more than 1% of 100k).
The majority (I think it is safe to say) of the RESIDENT farang in Udon, have permanent, long term relationships, and probably do not venture out more than a couple of times a week into the bars. Most, are quite happy to have a drink and chat with their friends, and the "hostesses" are just a bonus (eye candy ). They do not require the same "loud music" and "entertainment" as a tourist would, so it follows that most would not choose "Day & Night" for their evening out.
It has been noticable, that, in the last month or so, the bars in "Nutty Park" have been frequented by more customers than before. This may be down to the more amicable level of noise from the sound systems, but maybe it's just as much down to the colder weather, and people not wanting to "sit outside". It could also be that more bars have now opened, so there is a better selection for people ...... and if this is the case, warning bells should be ringing loud and clear for everyone in Night & Day, as when Phase two is open, the selection will be even greater.
The question then remains ...... what customers do you want in Night & Day?
If it is the Tourist, who will "throw his money around" pay the "barfines" and leave several hundred Baht tips, then you will have to ride out the tourist slump and wait for the "Good Times" to return, but if it is a regular clientelle, who will only pay a barfine on the occations that they are "between relationships", and that think B20 is a good tip, you will have to change.
The current music system is a "Tourist" system, A DJ with the same being played in each bar is a "Tourist" system.
Individual music systems, playing varied music at a lower level is more likely to attract the resident farang for his evening out.
That's just my view on the subject, and I'm sure there are others who will disagree, with any luck they too will post their thoughts.

the problem is not with each bar playing their own music, that can actually be a plus, as i was at pattaya one time, and there was a live band, doing a queen set, decent enough, except some songs i don't care, but a couple meters away, i could walk around a glass/plexiglas wall, ans listen to a little CSNY, or turn anther corner and catch a little footie, though not my choice. the point is, options were availabe. at DN, you have one or 2 bars, completely dominating the airwaves with, most will agree, terrible music at and extreme intrusive level.

below is a prime example, of some entertaining eye candy, but turn the volume up, so you can here what the katoey bar is playing next door, simply not enjoyable.

http://www.youtube.com/watch?v=qrDbDxaTnTU

I think, in many ways, D&N was designed as a replacement for Soi Falang.
Soi Falang (in the beginning anyway) was always popular. However this was for a couple of reasons. Firstly it was the only concentration of Falang Bars. So, unless you wanted to go to one of the few 'on their own' bars to specifically meet friends, it was the place to go and meet fellow Falangs. Second there was quite a variety in what the bars there offered. If you wanted girls, they were there. If you wanted a more relaxed atmosphere those bars were there too.
D&N is now not the only area with a concentration (well easy walking distance anyway) of bars now.
Most of the more established "relaxed" type of bar ended up in Nutty Park. So that is probably the venue people looking just for a drink in a Falang style bar would go now.
Just around D&N (within easy walking distance) there are also a variety of bars offering a variety of 'services' without the "concentration" that exists within D&N.
Basically, there are just too many bars in Udon searching for too few customers. Customers have such a variety of choice that they don't even have to bother complaining if they don't like something - they just walk a 100 meters to find something that suits them better.
Agree with Statto about where D&N customer base is aimed at. Sadly, for them, that customer base is at an all time low. It will probably not improve for at least a couple of years - unless something dramatic happens in the play grounds of the South and drives their customers to Udon.