Karaoke Forums

They only start to rat each other out when they get caught, much like hosts before shifting without permission was widely known, getting caught then becoming some of the biggest cheerleaders for SC. Now they say you should educate yourself and embrace the process. I wonder if it would be business as usual if they had never been busted?

What Timberlea is saying, is that the profit margin is much larger for the pirates (based on not getting caught), not the legit hosts, because they did not make any major $$$ investment in their music.

Still cueball the total profit margin is down because the price charged to do a gig is down, because of the pirates cutting their prices, and this forces everyone to take less, right?

If a pirate is running a show at a "CUT" rate, he is still making a profit, since he didn't make the initial investment that a legit KJ did. Part of his profit margin is the fact that he didn't spend $5K plus (let's say 5K because that is SC's price for their GEM series) for music.

But the long time KJ should have recouped his investment years ago. With the price of karaoke tracks down below $1 per track now and single downloads available, the pirate KJ can match the legal KJ with music investment on a monthly basis. As a DJ, my only monthly expense for music and videos is roughly $80 per month from Prime Cuts, I'm sure karaoke is less than that. I have made back my investment of about $800 per year each of the last several years by doing multiple gigs during the year. Are you saying an experienced KJ can only make less than $80 more than a brand new KJ using pirated karaoke? Doesn't make sense. What you spent 15 years ago is gone and has no relevance to this year.

If a pirate DJ steals every bit of music I buy, he's got an $80 advantage per month on me. That's about an hour of my time. KJs need to quit crying about stolen music advantage, DJs deal with that same situation and yet the ones of us that are full time make a living just fine. Stop making excuses and provide a better product to the marketplace.

Rick, it doesn't matter if a KJ paid off his or her investment or not. The point is the KJ spent thousands on his or her investment for their return while the pirate did not. It is simple bookkeeping. Ask an accountant. Why should a pirate make a profit on anything at all?

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You can be strange but not a stranger

What Timberlea said and......

As an example -

Pioneer Laser Discs - No longer being produced. What is out there is all that will ever be made. Not something that can be had via a service for any amount of money. In other words, pirates actually have something that should not even exist for them because of the relatively small number of discs that were ever produced. The pirates have copied LaserDiscs that have not only some of the highest quality instrumentals, but also the AWESOME cheesy videos that go with them. Since this content was produced in a relatively limited supply and there never was any downloadable, digital version, then the pirates have a level playing field by offering it up as a part of their library. An "advantage" that should only exist for people with physical product.

Sound Choice Discs - Same as above. Discs that are out of print can only be purchased from remaining stock or from private individuals.
Not something that can be had via a service for any amount of money. Again, very high quality content that the manufacturer produced in limited supply and does not exist in any publicly available non-disc format.

I can go on, but hopefully you understand my point. There is karaoke music the pirates have that could only have been acquired via piracy because the quantities of discs produced do not equal the digital copies that exist. They have effectively taken something that should be "rare" and made it common and thus eliminated selling point that only long term or very dedicated collector hosts should have.

The investments made by long term hosts and those just now entering the business *do* mean something. The lengths with which I go to legally acquire some music is simply ignored by the pirates who get it for free.

-Chris

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-Chris

Timberlea I get your point but the investment from 10-15 years ago is done. If I had spent $20,000 over a 10 year period, hopefully I made more than $2000 per year and my investment was paid for with the fees I charged. Chris, I also understand your perspective, being a fairly newcomer to the business. But look how many tracks on all your sc discs that never get played. Having 100,000 tracks is not really an advantage if I can only play 12-15 per hour on any given night, so a pirated library is more fluff than content.

My point is, I compete with other DJs every day that probably have pirated their music, doesn't change my rates, doesn't change what I do, why is it considered to be such a disadvantage to KJs? I've run a karaoke show 7 nights a week in a resort area so I know what competition is like. We ran a legal show, and were surrounded by pirates, but the atmosphere and show we ran made us the top place in myrtle beach to sing karaoke.

There is nobody out there suing DJs like sc or cb but we still have to deal with the same issues as you.

Chris there is no recourse against pirated pioneer or a number of other brands so it looks like sc and cab are the only brands in question.

This is true rick so many of the former labels are either out of business, or no longer doing business in this country, or have changed the way they deliver their product. A great volume of material has simply fallen into the freeware zone, and anyone can use it with little fear of any company coming back to them. I think it is because most have probably done a cost analysis and feel it would not be worth their time to sue in court. The cost would be greater than the return, something you try to avoid if possible. I also believe you are right there maybe some initial advantage to the pirate due to not paying legally for the library. If they are in for the long haul like most professional hosts, however that advantage fads with time. That is why most pirates are a revolving door coming and going, while the true professional like the ever ready bunny keeps going and going. Have nice day.

Rick - several issues here

1) Pirates are thieves. That alone should be something we take action against.
2) Because of the lower cost to entry, they have saturated the markets and have pushed rates down. That is a fact.
3) The amount of time it takes to become profitable is a significant factor

I am going to run through a scenario here. There will be a lot of costs I leave out of this simply because if the pirates aren't going to pay for music, they aren't going to pay for proper business licenses, insurance, etc. So we are going to just take all of that out for now and look at just hardware and music.

Let's say that we have two potential hosts -

Host 1 = Pirate
Invests is a decent sound system @ $5000 for the hardware, lights, PC, the whole deal.
Invests another $250 in a Pirated Hard Drive
Prints Books = $250 (more than I think most pirates spend)

Up Front Investment = $5500
Ongoing Investment = $0 (because they steal all their updated music)


Host 2 = Just Starting / NOT a pirate
Invests is a decent sound system @ $5000 for the hardware, lights, PC, the whole deal.
Invests in *JUST* a GEM series (but potentially spends a lot more to get variety) @$3500 on Holiday Special right now
Prints Books = $250 (same as the pirate)

Up Front Investment = $8500
Ongoing Investment = $25-50/month - based on the thread here -
viewtopic.php?f=11&t=24205&hilit=spend+on+karaoke+month

And for reference.....

Host 3 = Old Timer / NOT a pirate
Has invested $10-30,000 (or more!) over the years in equipment because it breaks, technology has changed, they flipped from discs to computer, etc
Has invested $40-100,000 or more in music over the years because they were early adopters and bought LaserDiscs, then CD's and bought at retail store pricing before Craigslist existed and before the now super low eBay prices.
Has Printed and Reprinted Books over the years or maybe even invested in a Kiosk system. Any way you look at it....lots of money so singers can find music

Over Time Investment = $50,000 - $130,000 or more (not including books/kiosks)
Current Ongoing Investment = $25-50/month (same as above)

The next part is hard to calculate because the price charged for a karaoke show has changed over the years. In the early 90's, I know hosts that charged $300-$500 per night for regular weekly karaoke. I don't know of anyone that gets that any longer. $150 seems to be about average here for legitimate hosts. Some are $200/night but I don't know of anyone that makes more than that for regular weekly karaoke. I know of pirate hosts that charge $100, $75 and a very small number that charge $50 per night.

So let's drop the long term host for now since there is no easy way to calculate rates and investment over a 15 yr or longer span.

Host 1 = Pirate
Up Front Investment = $5500
Ongoing Investment = $0 (because they steal all their updated music)
@$150/night
Recoups their investment after 37 nights.
Let's say they work 3 nights a week/12 nights a month
So just about 2.5 months and they are running a pure profit engine. Everything over $0 is pure profit for them.

Host 2 = Legitimate
Up Front Investment = $8500
Ongoing Investment = $25-50/month (paying for new music)
Recoups their Up Front Investment after 56 nights
Let's also say they work 3 nights a week/12 nights a month
They have paid off their up front investment after 4 months.
**BUT** accrued an additional $100 - $200 in additional costs purchasing new music during that time which adds just over 1 more night to the mix be running a profit. Also have to account for that on an ongoing basis.

Now, if we then factor in that legitimate operators are probably more likely to get all the rest of their ducks in a row with insurance, business licenses/fees, paying taxes, etc, it is plain to see that it is much more profitable to run as a pirate.

It also means that pirates have a lot more wiggle room with their fees because they don't have the same operating costs as a legitimate host.

I don't worry too much about losing my gigs to other low cost hosts. What I do struggle with is going to a venue that just dropped a host and convincing them that my $150 or higher rate is what I have to charge to be a modestly profitable business even though they may have been paying the previous host $125 or less.

Piracy has and does impact rates.
Piracy also lowers the cost to get started significantly which in turn has saturated markets which in turn has forced a lot more rate competition.

-Chris

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-Chris

I don't argue with your conclusions Chris there is one thing I will add, how many of the number 1 hosts really stick it out for any length of time? They come and they go because as you have said they don't have the much of a stake or commitment for the long term. They are victims of their own business model. They have saturated the market, they are not making enough of a profit to really support themselves, and soon they loose interest, because being a successful host requires more work frankly than they are willing to put in. Host number 2 has more of an investment, and commitment to the long haul. So much of this business is desire to succeed, and hard work. That is why even if you are well financed and go through the process of paying for everything, you still might find out after the big investment, you really don't like hosting. Not everyone is cut out to be a host, even if they have the money to set up their own business. I know a woman who was a great wedding planner and made tons of money doing it. She hired a DJ/KJ to do all of her weddings. She got the bright idea that she could cut out the host and do the show herself and keep his fee. She bought everything she needed spent over $30,000.00, only to find out, while she liked being the planner, she didn't like being the host. Have a nice day.

Hey Chris, your rather dreary scenario almost makes it sound worth it to be a pirate. Just think, a decent pirate could go at it for YEARS without getting in trouble, if ever, as long as they didn't use SC or CB, or DTE once they get into the pirate networks.

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Chris,

You put a lot of thought and time into your answer, so then I have to ask the question: Why would anybody want to start a karaoke business at this point? How, in your scenario, could someone build a business case for it? I looked at all those issues two years ago and because I couldn't see a way to grow a business like that, I chose to buy a DJ Trivia franchise, where I could expand without $3000-5000 in business expense every time I wanted to increase my business. Then I created DJ Bingo and now I also am starting VJ Bingo. My cost to add an additional DJ Trivia DJ/VJ Bingo host is roughly $600. I can then put that person to work 7 nights a week, without legal issues, without being audited by a vendor and without working until 1:30 or 2:00 am every night. We currently do 37 shows per week and I make money. I understand the guys who have been in the business for years, they have too much time, energy and money to back out, but I don't get jumping on that horse from scratch given the toxic environment surrounding the karaoke business. Explain your thought process, but only if you want to, I just don't get it.

That is because Smoothedge other manus besides SC have gotten past the idea of suing in court to recoup loses due to piracy. They have moved on probably after doing a cost analysis and determined the amount of money it would take would not be worth the possible return on investment, in the legal process. You are right about one thing, the amount of freeware status material out here could supply a host with a show, and they would not have to worry about being hauled into court. That is another reason the legal process is doomed to failure, the hosts could boycott SC and if need be CB/DT until they went under, and their product eventually fell into the freeware status zone as well. Have a nice day.

So rick you thought outside the box and came up with a business model karaoke free. As time goes on this might be the future of the industry, no future, because the manus end up killing the thing they are trying to preserve. They say you always kill the thing you love.

"decent" and "pirate" are mutually exclusive. The simplest of simpletons can get away with it for years on end which is something we have all seen and continue to see.

-Chris

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-Chris

I can only speak to my reasons for doing this....

I am looking at a very long term investment at this point that involves a lot more than just running karaoke shows. I am diversifying my interests instead of putting them all in one basket. That includes, btw, adding Trivia nights, doing DJ work, Weddings, Corporate events, and other things I don't care to mention right now.

-Chris

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-Chris

Lone - Do you spend your days conjuring things up out of thin air to post to the forums?



You have no idea why the other manufacturers haven't pursued legal action. You are just making up your own reasons and assuming that's what the manu's are doing.



Then you throw in something that sounds perfectly legitimate and reasonable to make it sound as if you know what they are doing when.....you don't.



I wouldn't be so sure about that. There is always the possibility for DK management to change direction. Same with Pioneer, and others that are still around. Even the brands that don't appear to have any real owner could get snatched up by an enterprising entrepreneur with a taste for stirring the pot and going after the bad guys.



This is where you are completely and utterly incorrect. The SC lawsuits shook up the industry and for the first and only time made pirates re-think what they were doing. In the areas that SC sued, SOME pirate hosts got out *or* got caught and settled *or* legitimized themselves in part or in whole. The industry on a broad scale started to talk about piracy instead of just ignoring it. The lawsuits, if nothing else, have placed the subject of karaoke piracy into a more public forum where even the singers and venues know something about it. I can't help but think that even a small percentage of people make a conscience choice to not steal the music now as a result. YOU may not like their tactics, but they caused some much needed waves in the industry.

I would like to see SC and DT expand their efforts. I would like to see them really focus their energies and bring the hammer down hard on some people and make examples of them so that people truly think twice about stealing the karaoke music.

BTW.....My prediction is that SC will stay alive for a while yet. I don't think Kurt is ready to throw in the towel. I believe Kurt wants to go into production again and will. I believe 2013 will see some things from Sound Choice that will surprise the anti-Sound Choice folks.

-Chris

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-Chris

I would not recommend anyone get into karaoke full-time. It's almost foolish for some people to take a sound system, invest in karaoke music and start running karaoke. Might have been feasible 5 years ago, but it's just not the same.

It's a great sideline gig, but I highly recommend spending all of your efforts learning the wedding biz and refining your marketing efforts. One wedding pays an entire week's worth of karaoke. I'd rather work one night a week for $X.xx than 5 nights a week for the same price.

That's where I'm at now. Through attrition, I am down to 5 total shows per week, 2 of which are on Friday. I do two of those shows and my Saturdays are reserved for weddings/private parties. I am not actively searching for new shows and if I got a call, I would only accept it if one of my guys were willing to do it.

Not me! Not anymore.

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