Since it's been asked... I did some checking on the sound choice web site and here's what they say:
Can I use your karaoke media for my recording booth at the back of my store. My customers want to make a quick demo of themselves and they are NOT buying the karaoke media.
If no purchase of the karaoke media is made then that media becomes a "master source" of which a master track fee should be paid. Retailer booth owner cannot use ONE CDG as a master for multiple copies. We do have a MASTER TRACK LICENSE program for booth operators though - any other variation is ILLEGAL
and
Can I use your karaoke media for my recording booth at the back of my store. My customers want to make a quick demo of themselves and they are buying the karaoke media.
Yes, as long as there is a one-to-one ratio of a karaoke media sold for every recording made.
and even
I have some of your tapes and want to use it for an album. I want to make multiple copies of this recording and I plan on selling it. Do I owe anything?
Yes. This is a commercial use. Permission must be granted and mechanical royalties are paid directly to the publisher at what is called the Statutory Rate (it is currently .0695 cents per song per copy). You must pay a master track fee for the use of each Sound Choice song. ($150.00 per song)
All information located
http://www.soundchoice.com/faq/3.shtml.
and answered in their forum here:
http://www.soundchoice.com/ubb/Forum1/HTML/000693.html
Other manufacturers will vary on how they handle this specifically, but this is what SC has to say about it. I looked on the Priddis site and didn't see anything right away about it, but I'm new to thier site so I may have missed it.