Almost 2 1/2 years ago, I wrote my first blog post here. When I wrote, I had a goal – get the word out about an issue I was having with getting all of my certification information in order from one of the karaoke manufacturers.
I didn’t give any thought to anything beyond that. I wanted a platform to complain, maybe find a few others that had a similar issue, and then……
Over time, I have posted about other karaoke related topics, certifications, legalities, karaoke services, etc. No real consistent theme behind it. Speaking of consistent….I haven’t been very….consistent in posting.
Prior to this post – August 30th, 2013 – was my last post.
Not a very good showing for someone that is as invested in karaoke as I am.
Today I am rebooting the blog.
It will have a clear focus – all things karaoke – a very broad topic considering the current state of karaoke. I will probably spend a fair amount of time on piracy and what I know about the legalities of running a legitimate karaoke show, but I don’t want to get too bogged down in all of that. Karaoke shouldn’t be about any of that at all. It should be about having fun with friends while butchering songs and drinking. But the harsh reality is that karaoke is about legalities, licensing and piracy. So I will have to go there and I expect those post to generate some of the more….colorful…..responses.
I have a show to run tonight so tomorrow I will be mapping out the 1st half-dozen or so posts I want to do.
I hope to have the first one ready to go by Sunday.
For those that missed the Karaoke Cloud Music City Summit 2012 stream on 06/22/2012, here is a not-so-brief summary of one session that was delivered today.
Ryan Sherr from PCDJ, did a demo of using the PCDJ Karaoki software connected to the DigiTrax KaraokeCloudPro service.
In a nutshell, a KJ pays a monthly fee for unlimited access to all of the tracks that will be available from the DigiTrax cloud service. I believe the number that was suggested was in the order of 60,000 tracks with duplication across multiple manufacturers. You can either stream from the cloud live, or you can temporarily store a local copy for offline use when no Internet connection is available. KJ’s would be allowed to synch to up to 3 computers time, but only one computer at a time can be used.
The suggested fee during the presentation was possibly a $99 introductory fee with a regular cost of $199/mo. This would be “per system” which, when clarified, meant that running concurrent shows would require multiple subscriptions. Thus, if you are a multi-rigger with concurrent shows, you have to have a subscription for each concurrent show.
If a KJ were to have 3 shows at 3 venues all on the same night, that would require 3 subscriptions at $199 each for $597/mo.
That is a LOT of money even for the most aggressive KJ/Hosting company. If you only have 1 rig/show running 5+ nights a week, then *maybe* $199/month would be worth it provided DigiTrax produces new music quickly and regularly. But the multi-riggers I know of, don’t buy the exact same new music for every single rig they have in operation. They tailor it to the venue/crowd/location. Thus, a flat $199/mo might make sense for one location where it is way too much to spend for access to new music that will never be requested at another.
But lets keep it simple for now…. 1 Rig/Show
If a KJ runs it themselves (not hiring someone) and they get $125/night for a 5 night run at a venue, that means ~$2500/mo Gross pay. Which also means that 8% (@$199/mo) of the Gross pay gets chewed up with the cloud subscription.
But lets account for different wages –
5 nights x $200/night = ~$4000/mo = 5%
5 nights x $175/night = ~$3500/mo = 5.5%
5 nights x $150/night = ~$3000/mo = 6.5%
5 nights x $125/night = ~$2500/mo = 8%
5 nights x $100/night = ~$2000/mo = 10%
5 nights x $ 75/night = ~$1500/mo = 13%
…and for those who don’t work 5 nights a week –
3 nights x $200/night = ~$2400/mo = 8%
3 nights x $175/night = ~$2100/mo = 9.5%
3 nights x $150/night = ~$1800/mo = 11%
3 nights x $125/night = ~$1500/mo = 13%
3 nights x $100/night = ~$1200/mo = 16.5%
3 nights x $ 75/night = ~$ 900/mo = 22%
The math is pretty simple so you can easily see where you fall into the mix based on nights and wages. The point is, the cloud subscription as proposed now is a fixed cost. The more nights you have and the higher your wage, the easier it is to absorb the cost. It is more valuable on months where a bunch of new, desirable music gets released and much less valuable in months where music sucks eggs.
Regardless, the cost is pretty much out of reach for the low wage/low volume operators.
If we look at it from the perspective of how much new music a host adds per month on average, and we use the preliminary results of the poll I posted, no one is spending $200/month on new music for a single rig. Since established hosts will already have an investment in music, there is nothing to gain from adding the cost of the cloud service except to increase the size of their library (which has a highly debatable impact on marketability).
This seems to suggest that established hosts have nothing to gain from adding the extra monthly cost to their business plan.
However, there are two groups of KJ’s where this model does work out…at least in the short term.
New KJ’s coming on the scene
Instead of purchasing a bunch of music up front, for a mere $199, they can set up shop and have access to a huge library that rivals many long term hosts. The potential for even more market saturation is very high and is something I view as a threat to wages across the board and to the future of independent karaoke hosts as a whole. Long term, I can see bars just setting up their own sound, paying the monthly fee, then hiring hosts at minimum wage to run the shows.
Pirates that want to avoid a lawsuit/go legit
See above. $199 and they are golden.
Of course, in both cases, as time goes on, the benefit goes down. For a few thousand dollars, a KJ can buy discs retail, on eBay/Craigslist, or from other KJ’s and have a permanent library that they own outright. After approximately two years ($4776 in cloud service fees) they will have paid as much as what it would have cost to buy the content. Call it poor man’s financing. Some will do it because it is the only means they have. The smart ones will figure out they are not getting a very good deal and either not sign up in the first place, or buy content elsewhere and drop the service. Accounting for the volume and wages calculations above, and it just doesn’t make a very cost effective solution.
What DigiTrax could change…
Lowering the cost is a double edged sword. Lower cost makes it more valuable to the long term KJ but also dramatically lowers the barrier to entry for new/pirate hosts increasing market saturation and driving down wages. This is a tough one to crack – balance value for established hosts vs market saturation vs sales/profitability for DigiTrax. I personally think they will do the latter. After all, the more they sell, the more they make, and I don’t think they have a true grasp on what is “right” for the industry as a whole.
A few variations on a potential solution would be….
Offer a Trade-In Program for a reduce service fee. KJ’s could trade in existing libraries in exchange for a “certification” and drastically reduced fees. This gives established KJ’s “credit” for their existing investment while reducing the cost to access new content dramatically. I personally don’t like the idea of giving up my discs….so an alternative would be…..
An audit, or, since that word has left a bad taste in many a mouth, some means of proving you own an existing quantity of discs and provide a discount based on what is already owned.
In both of these cases, it would be a high overhead/cost/administrative option for DigiTrax so i don’t see it being implemented either. But I want to offer solutions along with my critique.
Allow storage of existing physical library in the cloud.
Provide a “ripping service” to convert existing physical libraries into MP3+G and store on DigiTrax Servers. This could either be facilitated by shipping discs to them to rip and then ship back or even store in a secure location, or, just put a disc into a local computer and rip it to the cloud and keep the original locally.
The obvious problem with this is determining if it is an actual original or a burned copy, so some additional verification would be required. Since an audit would add in the administrative costs/headaches noted above, I don’t see that as the solution. It might be possible to do scanning or photos. My bank allows me to scan checks and deposit them via the web, we should be able to figure out how to scan or photograph discs and deposit them to the cloud.
The final suggestion (and what I think is the best solution) is this –
Instead of coming to market with a 60,000 track library at $199/mo, Lower the monthly fee ($19.99 – $39.99/mo) but only provide access to the last 1-3 years of content. Established hosts won’t be paying for access to stuff they bought 5, 10, 20 years ago, new hosts won’t be instantly competitive with established hosts without investing in additional sources of music, and pirates can’t simply go legit without any repercussions. DigiTrax could then charge a much higher fee on a one time basis, for access to older content. Maybe in the order of $1000 or more for access to 5 year blocks of music, or certain collections of older karaoke music. Package it up and sell it a la carte. Just don’t offer financing for it as that defeats the purpose. Make people put skin in the game and put it on their own card or take out a 2nd mortgage or whatever the rest of the REAL karaoke hosts have done over the years.
I am trying real hard to see the benefits of using the DigiTrax cloud over using the current standard of computerized systems, but the costs just don’t play out without some real disruption in the market. I does have the opportunity to bring more legality to the marketplace, but it isn’t going to do the already legal hosts any favors from a wage perspective. KJ Wages are more likely to continue to go down relative to the cost of the service. We *will* end up here, but we may be in for some real shocks and surprises on the road there.
Note – My initial post was an incomplete draft that excluded some responses from Kurt. Please see edits in Blue.
On Saturday, May 12th, Kurt Slep of Sound Choice held an open meeting in the Seattle area for KJ’s, Venues, Singers and anyone else interested in what was going on in the karaoke industry. There was an invite published in the local print and digital version of the Northwest Karaoke and Entertainment Guide.
There were a total of 15 in attendance plus Kurt. One of those was Ty Hughes, editor of the aforementioned guide. There were also two of the local auditors/investigators. I did not get to speak directly to everyone in attendance, but I believe everyone else there was a KJ. No venue owners. No Singers.
Many of the KJ’s had been in business for greater than 5 years. However, one of the KJ’s, Joshua Baron who runs Absolute Karaoke, runs one of the larger operations in the area which he started up about 4 years ago. He also brought in a significant collection of Sound Choice discs to show to Kurt. He runs 5 rigs and they are currently doing an internal audit in preparations for the Sound Choice audit.
I completely forgot to ask how many folks there were already Sound Choice certified, but in the course of the meeting there were two other KJ’s that indicated there were certified. So at least 3 including myself. One of the certified KJ’s was sued in the first round of lawsuits in the Seattle area but was dropped when he went through an audit.
The bulk of the meeting involved Kurt talking about the industry. He provided some history about what happened in the Seattle area, but I think most in attendance already knew most of what he talked about. However, there were some interesting points that were brought up by Kurt himself and throughout the day during Q&A.
Sound Choice can’t combat piracy alone
KJ’s have to purchase and use only legitimate karaoke music. Do this and the problem is solved.
While it was acknowledged by all in attendance that it would be nice to see more singers and venues involved in reporting piracy, it is the KJ’s that are the most informed and the most qualified to identify and report pirates.
More Pressure on the pirates
Kurt confirmed that Sound Choice would be working with Piracy Recovery, LLC to file lawsuits for trademark infringement on Sound Choice and Chartbuster trademarks. The idea is that as hosts have pulled Sound Choice and begun to rely more on other manufacturers, that Chartbuster has started to see a lot more use and likely because Chartbuster music is being pirated. As the pirates realize that Sound Choice and Chartbuster are aggressively suing, they will have to go legit, get out, or pull both SC and CB. The latter means reducing the quality of their selection even further making it more difficult to maintain their shows.
Piracy Recovery, LLC is a good thing
To me, one of the most interesting and thought provoking comments Kurt made involved Chartbuster and Piracy Recovery, LLC.
Piracy Recovery, LLC is a new entity that is investigating and pursuing legal action to protect Chartbuster Trademarks and IP.
Kurt Slep said the following in the meeting –
“Chartbuster cannot be allowed to fall into ‘freeware’ status”.
The more I think about this, the more concerned I get and the more I worry about the future of the “legal” karaoke industry.
Given the large number of manufacturers that formerly produced music, went under, and have no one pursuing legal action, there is a significant amount of “freeware” karaoke on the market. By “freeware” I mean that you could obtain this music and use it without fear of the karaoke company coming after you for piracy because no one is representing their rights. You would still have the record labels, artists, etc. to worry about, but we all recognize how minimal that risk is.
My opinion – You can say what you want about the Sound Choice lawsuits and the yet to be seen Piracy Recovery, LLC process, but it seems very clear that if Chartbuster were to fall into “freeware” status with no one pursuing any legal action, this would result in a very significant selection of quality music on the market for the pirates to leverage in their shows. This would allow them to pull not just Sound Choice, but also Stellar/PHM from their libraries if they wanted to insulate themselves from legal action, and still have a very large, high quality karaoke library.
It is absolutely in the best interest of all legal hosts that Sound Choice and Piracy Recovery, LLC are aggressive in their legal actions. If not, then the pirates will ultimately gain access to two of the most diverse, and highest quality karaoke libraries ever made…..for free….and without any fear of legal action. For those that have been legally hosting for 5, 10, 20 years, it would be a slap in the face for those libraries to essentially go into the public domain allowing *anyone* to run a karaoke show for the cost of the hardware alone and have no fear of ever coming under any scrutiny.
Sound Choice and DigiTrax
Kurt mentioned that Sound Choice and the newly formed DigiTrax are already going to the music publishers seeking new distribution rights. The focus is on rights to distribute on SD and Hard Drive media though they are also inquiring about streaming rights for home use. Kurt was pretty adamant that until technology improves, he had no interest in pursuing streaming rights for commercial applications. I personally think this is a bit short-sighted because most suburban and metropolitan areas have quality internet connections and there are technologies for buffering that would accommodate temporary connection loss or bandwidth issues. While this may not apply to rural or otherwise sparsely populated areas, it would still be an additional revenue stream for Sound Choice and should not be so quickly dismissed.
He did confirm that he was negotiating with the DigiTrax folks on including Sound Choice material for distribution through their portal/services.
Sound Choice and the future
Kurt confirmed that Sound Choice wants to produce new content and that they are pursuing the appropriate rights and licenses. He stated that he was 95% certain that this would happen, but that he would not provide a timeline because of the variables involved. He also confirmed that the new content would likely be available only to certified KJ’s and GEM licensees. Distribution would be directly from Sound Choice and perhaps in conjunction with DigiTrax.
My Tough Comment and Suggestions
I originally compiled a long list of items I was going to hit Kurt with at the meeting. The night before I reviewed it and realized that there was really only a single multi-faceted item I wanted to address with Kurt. It revolves around the settlements that Sound Choice offers to those that get sued and are found to not be One-to-One Compliant. The following is a little more verbose than what I said in the meeting. There were also other questions that arose that prevented Kurt from responding directly to all off these items. I am following up with him in email to address the items we could not cover in the meeting –
1) Issue – The pirates that settle pay their settlement and in return get access to the GEM series which is undeniably a very good quality selection of Sound Choice music at a fraction of the cost of retail. Even those of us that scour eBay and Craigslist or buy out other local hosts, would spend a comparable amount of money to obtain those same 4800 tracks.
a. Resolution A – Ideally, I would like to see the pirates be told they are no longer allowed to use ANY Sound Choice material ever again. Alternately, stipulate they can’t use Sound Choice material for some significant period of time (perhaps 1-3 years)
b. Resolution B – Separate the settlement from the GEM series and make them pay separately for the GEM if they want to continue using Sound Choice material. Do NOT finance it for them. Make them pay for it in full at full retail. Increase the cost of staying in business to be more in line with what a true legal host incurs.
Kurt’s response – Sound Choice would continue to look at the legal remedies for future lawsuits. He suggested maybe reducing the amount of tracks offered in settlement from the current 4800 Tracks or “maybe 3000 or something smaller”
I don’t think that goes far enough, but I saw him taking notes during this discussion so I am hoping he is writing down these suggestions for future thought.
2) Some pirates may have been running their shows for only a year while others may have been running for 10 years or longer with material they essentially stole from Sound Choice. The fact is they are stealing the music. Yet they ultimately get to keep their gigs because they settle. This does absolutely nothing to help the KJ’s that have purchased music legally for that same 1-10 years.
a. Resolution – If it is an option, Sound Choice should pursue action to stop them from delivering a karaoke shows at their existing venues. If Sound Choice doesn’t have the legal rights to prevent them from doing a karaoke show at all, they can still stipulate that Sound Choice material can’t be used ever again as a part of a settlement. See above – Make it as difficult as possible for the illegal KJ to stay in business and give legal KJ’s an opportunity to take over.
This topic got sidetracked by other questions and comments.
3) Issue – Once the pirates settle and the receive the GEM Series as part of the package, they now get to market themselves as “certified” by Sound Choice. This further impedes the ability of newly established legal hosts as well long term legal hosters hoping to expand from picking up gigs from the pirates.
a. Resolution – Again, stop giving them the GEM series. If the GEM is still going to be provided, don’t grant them “certified” status. If certification status is still going to be provided, make them wait 1 year before their certification becomes active to prove they aren’t going to go back to their old ways.
Kurt’s Response – See above. But he did say that there was only so much that Sound Choice could do. Securing a gig, regardless of the circumstances falls to the KJ. I agree with this. I just want it to be on an even playing field and without battling against a pirate that became certified only because they were sued.
We ran a couple hours longer than we were scheduled for and I had to get out to get ready for my own karaoke show. This left me with one final point that I was unable to speak to Kurt directly about –
Long Term Vision
With a lawsuit and a subsequent settlement that Sound Choice recovers lost revenue for the company. Sound Choice has the right and should be pursuing legal action to recover costs. However, under the current model, once a pirate settles and they have the GEM series, there is no incentive for them to ever purchase anything from Sound Choice again because they already have the best tracks Sound Choice has to offer. Sound Choice could argue that they now have a new “legal” KJ that *might* purchase from them in the future if Sound Choice starts distributing music to Certified and GEM Series hosts. But these hosts weren’t purchasing of their own free will before getting sued. Their hand was forced with a lawsuit and a settlement. I have a hard time reconciling that any company would want to partner up with someone that stole from them – perhaps for 10 years or more! – and actively contributed to the near demise of the company. It seems very risky to bank the future of the company on former pirates going legit and then happily buying Sound Choice material in the future.
Instead, continue to pursue legal action and when someone settles, don’t give them the GEM Series and don’t certify them. Additionally stipulate in the settlement that they aren’t allowed to use any Sound Choice material ever again or at least for some extended period of time. If they want to continue using Sound Choice material, make them buy it like everyone else. Effectively give them the burden of operating their business as a business instead of subsidizing them. make them prove with their wallets that they want to be in this business and they are going to support it.
Furthermore, give the legal KJ’s that have always supported Sound Choice the opportunity to make a pitch to get the pirate out and establish a legal show in its place. Giving a GEM Series and a Sound Choice certification to a proven pirate flies in the face of those that have supported Sound Choice for years. It completely undermines the ability of legal hosts to expand their operations and all but negates the ability for a new host to even get a foothold in the market.
Replacing the known illegal hosts with legal hosts could potentially mean bringing a new rig online for the legal hosts. That means the purchase of a GEM or other retail Sound Choice material, and, since these are operators that were already purchasing product of their own free will, they are more likely to continue to do so in the future. The generates short and long term revenue for Sound Choice and does so in a manner that is much more agreeable to the industry. From a PR perspective, this would be a much better proposition – Sound Choice helps establish someone in a gig that has always been a Sound Choice supporter and is much more likely to purchase Sound Choice material in the future. Long term, this is a much more viable and profitable position to be in.
Wow. One of the premier karaoke music manufacturers just closed their doors after 24 years in the industry. Chartbuster Karaoke out of Tennessee posted the following message to some karaoke forums as well as emailed out to certified karaoke hosts –
Chartbuster Karaoke is closing the doors after 24 great years.
As you are a Certified Customer, you’ll naturally have questions about your certification status, and the continuity of your shows.
Your certification is legal, and will remain so, as the date of purchase is the only relevant factor.
Thank you for your support, and we wish you all good luck in your business endeavors.
It appears that another company has secured the rights to their karaoke library and a new portal for distribution is being set up at http://www.digitraxkaraoke.com. Considering the sizable investment I made in Chartbuster products and certification in the past 4 months, I have to admit to being a little anxious about what the future holds for Chartbuster music and the karaoke industry as a whole.
A few weeks ago, I started writing an article for a regional karaoke and entertainment monthly called Northwest Karaoke and Live Entertainment Guide. I did it on a whim as a response to some of the other articles I have seen in the guide over the last couple of years.
There have been a lot of articles about piracy and the toll it has taken on the industry, the clubs, the legal KJ’s and the singers. All of the articles make their point and discuss valid issues. But few of them addressed things that different groups of people could do to help.
I have a tendency to be long winded when I write (and speak!) so the article ended up being much longer than what they normally publish. The first of what I am estimating to be three parts was published in this months new edition which also ushers in a new format for the magazine.
Kudos to Ty and the rest of the folks that contribute to the magazine!
I have been pretty serious on my blog so far. Let’s change that.
This comes by way of a post on www.karaokescene.com
There has been and likely will be a lot of debate over what is going on in the karaoke industry and how the manufacturers are dealing with piracy. Now that I have gone through the “certification” process with the “Big 3” U.S. Manufacturers, I thought I would post my experience.
There is a lot of speculation, guess-work, and flat out incorrect information out there. I want to attempt to clear some of it up.
I also want to try to help those that are on the fence about what to do, to take a real life experience from someone that has been through it, and use that in making up their mind about what to do.
Finally, I specifically think Sound Choice in particular takes a lot of grief for their aggressive pursuit of rooting out illegal activity. This gets perpetuated by the beating they take from those that really have no true personal experience with the process. In spite of my own personal opinion about HOW they go about doing what the do, I absolutely support WHY they do it.
These ratings are based on the process of getting audited/certified/compliant with each respected manufacturer. 10 = fantastical / 1 = you just received a ziploc full of dog poo from your ex.
Stellar Records/PHM (3 out of 10) – For a company that is producing regular content, doesn’t seem to be actively pursuing pirates and stays very much out of the limelight, I expected these folks to be the easiest to work with. In reality, it took 6 months, a complaint to the Better Business Bureau (which I later withdrew), and consultation with a lawyer to get them to send me my certificates/license information. That is 6 months AFTER I paid $3200 in full, up front. Not to mention the particularly un-professional email volleys I received from their company president. Keep in mind, that they don’t audit, they don’t ask for a Skype call, pictures, or any other information that can’t be produced with in a few minutes. All they really had to do was generate some documentation, print it, mail it. It seems to me they had the easiest job of all three. But it was an experience that really set the stage for how I planned to deal with CB and SC. (I need to be clear that I am still a Stellar customer. I still get their monthly updates and I hope they change the way the deal with people that come to them of their own accord). Tony Walstra is a good guy in my book as are the billing and shipping folks. Their CEO is another matter. He is primary reason they are rated so low.
Chartbuster (7 out of 10) – Amazingly better than what I expected after the previous experience. I do feel I had to keep the ball rolling and if I had not, it would have taken longer. But everyone I dealt with was nice, kind, courteous. It took 2 months from date of full payment, up front, until we wrapped things up. Some of that delay was due to the holidays. Also, no audit since I was auto-certified with the purchase of the 12000+ drive. They had to serialize the drive, ship it, ship out some physical discs, create, print, mail certs and get me up on their web site. Much more work than Stellar. Greg Taylor was the sales guy I had the most contact with. I spoke to a few others on phone calls but I don’t recall their names.All of the Chartbuster folks were great to work with.
Sound Choice (8 out of 10) – The only thing holding them from a 9 is that we aren’t 100% yet. The score is partly influenced higher because I had very low expectations going in due to my Stellar experience and all the FUD that circulates about Sound Choice. I am still waiting to get posted to the Certified KJ site and to receive my certificates and banner. But we just performed the actual audit 5 days ago. We started the paperwork process less than 30 days ago, had to schedule an audit (in-person), and perform the audit. Sound Choice had the most work to do and has been the most prompt and responsive. Kurt Slep, the man framed by some as the scourge of the karaoke industry, has been responsive, and cordial. He even connected me with someone for a project I have been thinking about for a while. I suspect we will have everything buttoned up in 7-10 days max. Interestingly, they forgot to even charge me for my audit beforehand so I called them to settle up. Also good people. Chris Emrie is great, as are a few others that have been in emails threads.
The interesting thing is that the company (Sound Choice) that the most people are up in arms about and so afraid of, is the company that I (and others it seems) have had a very comfortable experience with. I think they have a very, very bad rep that is perpetuated by some very negative people. I have to admit that I was very skittish and skeptical about dealing with Sound Choice. But I have enjoyed – yes…enjoyed – it the most.