Trying to do the right thing in the world of karaoke piracy…Posted: December 2, 2011
You can click on the “About this blog…” link and get this same info, but for the sake of introducing myself and why I am here…..
My name is Chris E. Avis and I run Feel Good Productions. I host a Karaoke show every Saturday night from 9p-1a at the Rollin’ Log Tavern in Issaquah, WA. My show is 100% Legal (I own the discs for every song I make available for use at my show). This blog is about karaoke…..the venues, the singers, the music, the industry……
Struggling to make ends meet….
In this day an age of piracy, we all know how easy and tempting it is to download or copy for free everything from computer software, to music, to movies. The same thing applies to the world of karaoke. You can search eBay and Craigslist and in seconds find people selling hard drives with 10, 20, 50, 100, 0r even 200 THOUSAND karaoke songs on then for a couple hundred dolars or less. It sounds like an awesome deal for someone that is trying to break into the karaoke hosting business. But those hard drives as well as iRC channels and other sites that allow you to download or swap karaoke tracks for free are literally killing the karaoke industry.
You have probably heard the whole story of “If you copy that music CD, the music company doesn’t get paid. If the company doesn’t get paid, they can’t pay the artists and myriad of other people that make the music possible. If the artists and others don’t get paid, they don’t make music. If no music gets made, that leaves nothing for you to pirate (or buy)”. Paying for it ensures the process is sustainable. The software, music and movies industries have thus far been able to survive the onslaught of piracy because of the billions of dollars that still come in. Their business models are such that enough people are still paying for the content they produce that they can still make a significant profit and still be able to hire the right folks to produce more content and keep the process going. There is also the fact that in all of these industries, the market for the products that is produced is ultimately capable of being every single person on the planet. Anyone can purchase a movie ticket or DVD to watch what they want to see. Anyone can buy the music CD or use iTunes and pay for the track they want to hear. Anyone can go online or to a retail store and buy the software they want for their computer.
In other words, the person consuming the final product is also the purchaser. Which again, is potentially every person on the planet. It’s a volume business.
The karaoke industry is significantly different.
Karaoke music is purchased by a Karaoke Host (KJ) and made available to the singers (the consumer in this case) at no charge. Immediately we see that there is now a difference between the purchaser and the consumer and that the consumers far out number the purchasers. So no longer are we looking at every single person on the planet as a potential purchaser. I can’t tell you what the exact ratio is but if you have ever been to a club where there is one DJ or one karaoke host and 10’s or even 100’s of dancers/singers you can easily determine that the pool of purchasers is exponentially smaller.
Strike One against the karaoke content producers.
Some people think that karaoke music is just the original music with the original vocals removed. Not so. Karaoke content producers actually have to re-create the music with their own musicians. The really good karaoke companies have very talented, quality musicians that play so well it sounds like the original recording. Those musicians don’t work for free and the better they are at matching the original recordings, the more they cost.
Also consider that karaoke content producers have to pay licensing fees back to the music companies, musicians, and songwriters for the right to produce a karaoke version of a song and display the lyrics on screen for a singer. So before the karaoke music producers even record a track, they are in the hole and thinking about how they can recoup the cost of the licensing fees they have to pay just for the right to record music. These fees have gone up over the years as the music industry has looked at was to compensate for piracy in their arena.
Smaller customer (purchaser) base means lower volume, which increases the cost for a karaoke disc. Paying musicians to recreate the music isn’t cheap. Licensing fees have to be recouped as well. All of this means that a CD of karaoke music costs significantly more than a traditional CD from a band or even a compilation CD from a music company. You might be able to find a retail traditional music CD for $8-$15 most places where most original karaoke CD’s today are $17.95 at the low end and usually have only 8-10 tracks on them. (Note – $17.95 per disc is based on pricing from www.pophitsmonthly.com)
A higher cost per unit means that even a small amount of piracy has a significant impact on the profitability of the karaoke music companies. But when you understand that it is estimated that 90% of Karaoke shows use completely pirated karaoke music collections to host shows, you can see where it is becoming almost impossible for a karaoke music company to be able to continue to produce quality music much less be profitable.
The Problem for Karaoke Hosts….
Karaoke music is the single greatest expense for a karaoke host. Consider this for a moment –
A karaoke host that claims to have 10,000 tracks to choose from would have had to purchase 1000 discs at 10 songs each to acquire that music. When you consider that many karaoke companies have actually re-issued some songs many times across their catalogs, to acquire 10,000 “unique” songs would mean you would have had to purchase a lot more than 1000 discs. But let’s keep the math simple. 1000 discs at 10 songs a disc = 10,000 songs. At today’s prices of $17.95 per disc, that is $17.95 times 1000 for $17,950.
I am not saying that every 10,000 song karaoke host is a pirate, but check their credentials – if they have been in the industry for 10 years then they may actually have paid for it.
Here is an ad from Dec 2nd, 2011 on Craigslist
“___KARAOKE 110,000 Songs 500gb hard drive $350 This contains 110,000 of the BEST KARAOKE MUSIC with PDF files. There is Mainstream & Alternative, Greatest Hit Songs, Top 40’s, Pop, Rock, Hip-hop, Old School, R&B, Classics, and plenty of other Genres. Comes loaded on a Western Digital 500 gig portable hard drive. Plugs into computers usb compatible for mac’s and windows. Works with many DJ softwares… Great for all types of music lovers, Dj’s, Vj’s.”
110,000 at 10 songs per disc = 11,000 discs @ $17.95 each = $197,450. Let’s pretend for a moment that the discs only cost $1 each, that would still be $11,000 dollars. No one in their right mind would sell an $11,000 collection for $350 unless it was pirated. I have seen 250,000 karaoke songs on a hard drive for as low as $150. You do the math.
This is ONE ad in ONE Craigslist city. You can find similar ads in every major metropolitan city on Craigslist. Occasionally you will find them on eBay too. You can also search the Internet and find a variety of peer-to-peer networks including scripted iRC channels for sharing karaoke files.
The Beginning of the End….unless we turn it around…
Having current, popular music is the only way to attract and maintain a dedicated group of singers to support a show. While those singers don’t directly pay the karaoke host, the money they spend on food and drinks at the bar and the word of mouth they use to attract others to a venue, have a major impact on whether a venue will want to have karaoke or not. Unfortunately, piracy means that for less than a thousand dollars, unscrupulous indiviuduals can put together a low quality karaoke show and undercut hosts that have invested tens of thousands of dollars over time in legal karaoke tracks. It is impossible to compete with a host that will do a karaoke show for $50 a night (I know of hosts that will do shows for the cost of a bar tab). This means legitimate hosts have to reduce the fees they charge just to hold on to gigs they have and may have to reduce even further to pick up new business. In the end, they won’t be able to invest in new music, quality lights, quality sound reproduction or replace equipment that goes bad.
We are facing a vicious cycle here where legal karaoke hosts can no longer afford to compete against the pirates and get out of the business all-together. This leaves a myriad of low quality shows that are short lived because of the poor production quality. Karaoke companies are charging more for less fresh music every month to try to stay profitable which in turn reduces choice for the singers. The worst case scenario is that all of the karaoke companies go out of business leaving us with a bunch of fly-by-night, low quality karaoke shows where there is never any new music because there is none being produced.
But we can still do something about it.
I encourage singers to ask the karaoke hosts where they sing if they are legal. If they say yes, respectfully challenge them to prove it. I legal host will make the effort to prove it to you. They will either produce discs, or receipts, or even certificates of authenticity that are now being provided by some karaoke music companies. They will be eager to prove to you that they are legit to gain your business and your trust. They will want to prove it so you will spread the word and bring in more business.
The hosts that aren’t legal will give you excuses about how they can’t prove it to you or that it is too cumbersome to do so. But keep the pressure on them. Let them know that some of the karaoke music companies have compliance programs to help them get legal. It isn’t cheap, but it is less expensive than a law suit or potential jail time for piracy. If you have to, speak to the club owner and ask them about it. Again, respectfully point out that if the karaoke host is using pirated music, that the club owner can actually be held liable and ask the owner to follow-up with the karaoke host.
If a hosts refuses to prove they are legal, then contact the Karaoke Industry Alliance of America and give them the information about the show. They can pursue legal action through the karaoke music companies. You can even contact the karaoke music companies directly. Below you will find contact information for three of the most popular (and most pirated) companies.
Chartbusters – http://www.chartbusterkaraoke.com/
Pop Hits Monthly – http://pophitsmonthly.com/
Sound Choice – http://www.soundchoicestore.com/
Finally, let your legal karaoke hosts know who the illegal hosts are. Increasingly I am finding that legal hosts will put pressure on the illegal hosts. I certainly will. Eventually, the illegal hosters will get the message and they will either do the right thing and get legal or they will get out of the business. Regardless, the potential end result is that that legal hosts can increase their fees, pick up new shows, buy legal karaoke to support those shows, and increase the profitability of the karaoke music companies which allows them to produce more, high quality music for all of us.
Chris – Feel Good Productions