Karaoke Forums

I have been thinking about this for a while now.

How could bars afford to pay a host $300/night in the early 90's but not in 2013?

Is it truly an economic factor for the venues where bars just can't afford that rate any longer?
Or is it the undercutters that have set the bar so low now?
Was the rate too high in the first place simply because karaoke was "the new thing" and KJ's could get away with it?

I am just trying to wrap my head around the cause and effect of why rates have dropped the way they have over the years. Every time I analyze this, it boils down to piracy and undercutting and those two go hand-in-hand. It is difficult to undercut by a significant margin unless your operating costs are also significantly lower (or you are being subsidized).

If we jump into the way back machine and look at karaoke in the early 90's, here are the conditions I see -

1990's Bar Stuff:

Not sure what fees bar owners have to pay to operate, but I can't imagine that they are exorbitantly higher now in 2013 than they were in 1993 (please correct me if I am wrong). As best as I can tell, the cost to operate a bar, when we adjust for time, inflation, and the value of currency over time is fairly relative. Maybe it is slightly "more expensive" to operate a venue today than it was in 1993, but, unless I am missing something, it isn't THAT much more expensive such that bars are unable to pay the same rate.

The drinking age was already 21 by the time karaoke hit the big time so we have not lost drinkers due to age limitations.
Over time, stiffer DUI Penalties may have had a nominal impact on reducing paying customers.
Indoor Smoking Bans have definitely had an impact on ALL public establishments But even now, there are still areas where you can smoke indoors and KJ's have taken the same hit on rates in those geographies as those in the non-smoking areas.

Am I missing something? Has the cost to operate a venue increased so much that they simply can't afford to pay the same rates they paid 20 years ago?


1990's KJ Stuff:
New Karaoke Music was VERY expensive. This is also prior to rampant piracy so the availability of pirated material is basically non-existent. No way to reduce costs by stealing it virtually. You would have to steal actual discs.

The cost of the hardware, time adjusted is somewhat relative.
The cost of living was lower.
Gas (travel expense) was cheaper.

Yet KJ's were commanding $300/night. How? Why? Because they could? Or because their cost to operate required that kind of a fee? While the cost to operate has obviously and significantly decreased, most jobs pay an individual more over time as people gain experience. So why have KJ's not adjusted their rates up over time as they get more experience and develop their followings?

For the hosts that have been doing this for 20 years -

In 1993, were KJ's the ones setting the rates?
Or were the Venues offering the rates to attract karaoke?
When did you see rates start dropping?
Why do you think they started to drop?
What other factors am I not considering?

The big question.....what was so different about karaoke that 20 years ago, a bar could afford to pay $300/night and now KJ's sometimes have to fight for $150 a night?

-Chris

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-Chris

For one, there were fewer operators and the supply/demand was definitely on the side of the hosts because of the expense to start out and maintain a good library. That, in my opinion, is the number one reason. And the opposite is the number one reason why the pays are lower today, a saturation of hosts with cheap illegal libraries. Now the supply/demand is in favour of the bars. Get rid of the pirates and things will swing the other way.

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You can be strange but not a stranger

I have to disagree with this statement about the 2 going hand in hand.

Back in the 90's (when I first became exposed to Karaoke), I believe the average going rate for a show in my area of NY was $250 for a 4 hour show. If the KJ was already established and had a good regular following, he/she got $300 for a 4 hour show (some made more (or so they claimed)).

As for what happened (that the prices dropped drastically), I would say that too many of us Karaoke Singers came into the picture... the ones who suddenly wanted to become a KJ. Many of the Karaoke Singers/Regulars that I knew (back in the 90's) were like me. They used to buy their own CDGs and bring them to shows with them because the KJ didn't have it (or wouldn't get it). More and more of us would be doing this. As our collections started to grow, there were some of us who started to surpass what the average KJ had. These people decided that they would throw their hat into the ring, and start running shows themselves. Some did it because they really had a passion for Karaoke, others did it because they felt they weren't getting to sing enough when they went out, so this would be their chance to sing more. Whatever the reason, there were many of us Singers going out there and getting the basic equipment and starter libraries (to add to what we already had), and soliciting for shows. We all traveled in the same circles, so we went to the same Bars to try and get them to hire us. As a result of this, many were undercutting what they knew to be the average going rate, and this started to stick.

Piracy wasn't really in the picture yet. Whereas a KJ WAS making $250 for a 4 hour show, the newbies were asking for $200 and less. Some were going as low as $125 for the same service. The Bar Owners knew this, and took full advantage of it. If I walked into a place and asked if they were interested in hiring me for $200, they would say that, "someone just came in the day before, and was asking for $175." Then they would ask if I was "willing to go lower," of which I wouldn't (but others would (and did)). At this point (getting closer to the year 2000 now), the average price for Karaoke was about $175 for a 4 hour show. Now, more KJs were getting into this (both legit KJs and pirates), and as the market became more saturated with KJs and Karaoke shows, the prices one could command were dropping. It seems that the prices hit the $150 average (with some KJs still able to command that $200 price), and that's where it has remained (at least in my area of NY... I've heard that in Portland, Oregon, the average KJ makes only $75 for a 4 hour show).

In the 70s pre-karaoke everywhere the bars that had live music were the larger ones that could bring in the amount of clientele to support paying for entertainment. I even saw the likes of Merle Haggard and Hank Jr. at these places. A smaller bar might have a band but not a large one or it might be a band just starting out that needed experience and would work for less. But mainly your neighborhood small bars made do with a juke box or TV and you wouldn't expect to find too much live entertainment there. That was saved for the "Dance Halls."

Now it seems every little bar has a band or a karaoke person and they don't have the capacity to pay much so they don't. Yet they still seem to find a $20 host or beer show which dilutes out the clientele a bit. It doesn't seem like the larger bars around here have a good chance at making a go of it. The places that get in the numbers of clientele to pay a lot are few and far between with lots of competition for those spots.

Cue also has a point. In the early days it seemed like a lot of the karaoke hosts were already professional entertainers or ex band singers who saw a way to make more off of the dwindling bar business if they didn't' have to pay the rest of the band. But they were good singers and had a lot of experience in how to work a crowd. Now it is a bit less intimidating as far a person feeling they have to be an entertainer in order to get into the business. But I don't think you can take pirates out of the equation. When it comes to supply and demand there seems to be an unending supply of karaoke hosts.

.. And karaoke is just not the novelty it used to be. The "Look at me" factor is gone. I'm surprised it's still as popular as it is.

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Okay, who took my pants?

I agree,, plus other reasons for the decline in pay.

It's simple... attendance and economics!!-- When I first started hosted, I could draw 150 people to a small bar on any given night,, But since the economic disaster of 2008, I can barely get 40 or 50 (if I am lucky). Karaoke is a fad, simple as that. It has lasted longer than most fads and in my opinion is on it's way out. Only a matter of time before its final doom.

I don't know anything about the areas others live in or anything other than Utah,, but back when I was 21 years old, in the county I live in there used to be 7 bars, and ALL were busy. Now there is only one bar left, and it struggles to make ends meet. Insurance costs have tripled or quadrupled in the last 10 years alone. One bar owner told me his yearly premium for his 110 seat club,, was over 8000 dollars per year for liability insurance. Break that down, and that is over $153 per week for insurance alone. Now drop in higher minimum wages for employees, higher costs for supplies, and less than half of the people that used to attend,, it's a recipe for bar failure. We are not alone I am sure.

Supply and demand of hosts has influenced how we have been perceived from the bar owners. Piracy has definitely been a huge part of that fact. But, I don't believe it is the cause itself of the declining numbers, only a by product of the bigger picture.

Don't forget all the clubs that own their own equipment and songs.

The "Look at me" factor is gone? Not here. Singers just keep getting better and better and I watch them still trying to top each other. This is true for the good singers, which, I will say have increased in proportion in the last ten years. Karaoke has made people good singers over the years, and don't think their egos aren't going up with their abilities. To me, that factor has done nothing but grow.

I think exweed meant that "Look at Me" factor in regard to Karaoke being a novelty, and that he's surprised Karaoke has risen in popularity (and is longer a novelty).

Like Tim & Mrscot said, simple supply & demand multiplied by format shift.

..."Back In Da Day"... Those actually were the days. Not everyone was willing to get into it or could afford to invest in it. It hit me in 89. That's the time I started hosting shows for other KJs/DJs. Already had a decent DJ Collection but never thought about making a $30,000.00 investment for Karaoke. Just hosting for others. Then mid-90's we did rent the equipment (including the music) plus what I already had in my collection.

...I will say this much, it was nothing to charge $250.00-$300.00 during the week nights (Mon.-Thurs) for the few KJs that were around. Then Fridays and Saturdays a good host could charge $350.00-$500.00. I know these were the going rates because I saw the checks these KJs were getting. Again, you didn't have a KJ on every corner. However, it would depend on the size of the Venue. Some places were just too small to support Karaoke. Private parties (wedding, birthdays, etc.) were always even better payouts. Of course a KJ would give a discount for multiple nights at the same venue.

....Many food and beverage suppliers would give deep discounts to these commercial venues and help with karaoke promotions (such as banners and advertising). Special events such as Birthday Parties, Anniversaries, Etc. were big nights for these commercial establishments.

...Even though DUI Limits haven't changed that much, the fines have. Looking back it seems as though people were splurging more back then by going out more often on multiple nights.

...Times have obviously changed. Plus, although it hasn't been mentioned or not that much, people aren't going out as much in these last several years. Not just because of a bad economy but also because of technology. Heck, a person or family could stay at home for weeks at a time if they had a job that permitted them to. You might go out for gas and some groceries but technology has made it very easy and convenient to just stay at home. Plus, just like Mr. Boo, I've had some friends come over (block party type of deal) just to hang out, listen, sing and dance.... Basement Parties.

As the supply of karaoke increases, the number of available patrons decreases (for each individual establishment).

One often glanced over result of this is an increased difficulty in making a new show work. Most markets are already saturated with karaoke, and a new shows that used to take 2-4 weeks to get going now seem to take at least twice that, if they succeed at all. The liklihood of success is dependent upon a number of factors, such as host factors, venue factors and night of the week.

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I'm not a cheerleader, but I paid for my pom poms with my own money!

That is very true, however you would think if there are fewer bars, then the available customers would attend those bars. That has proven not to be the case for whatever reasons I cannot say. Take for instance where I live, like I stated before, this county had 7 bars which were all busy in their day, now there is only 1 bar left and we only draw about a third of the people that we used to draw even up til only about 5 years ago. People here don't go out nearly as much as they used to do. Combined with the fact the bars operating costs have increased substantially, they simply cannot afford to pay the prices they used to be able to. Profit margins are simply not as wide as they were in the "Good Old Days". And I also believe (here that is, maybe not where others are tho) that karaoke is being killed,, not just dying, it's being slowly strangled by various factors of which we might talk about another day.

I have some insight on that. I live in Michigan in the Muskegon-Norton Shores Metropolitan Statistical Area (Michigan). This area lost some population in recent years (-1.2%), but this is much more evident in the outlying areas where school counts dropped an average of (-10%). What this suggests is that families left the outlying areas for whatever reason and either relocated closer to town (cheaper living) or left the area.

I can't prove a positive correlation, but it's about the best reason I can think of to describe the loss of business we (and all bars in the outlying areas) have experienced. It's not the older folks who come in in droves, drop silly money on shots, and stay until close. It's the younger ones - mid-to-late 20's. Their irresponsible behavior when it comes to money might indicate that they are less prepared to weather something like long-term unemployment. They lose their home (or get evicted) and end up moving into the urban area, where housing is cheaper, they are closer to jobs, and rental housing credit restrictions are much more lenient.

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I'm not a cheerleader, but I paid for my pom poms with my own money!

I did three different Basement parties over the long 4th weekend. A few people went to two and only two people (including me) went to all three. 15-20 people each I would guess. But think about it... That's maybe 20-30 people that might have gone to a bar for karaoke if they had not had a basement deal to go to.
One couple is looking to get their own stuff now. They plan to use the Singsnap playlist feature when they don't have me and my library over. So that is a HUGE library available for a reasonable monthly fee to a home user.

I think the basement thing is bigger and playing more a part of declining numbers, and declining pay, then some think here. You can go to a bar, play a lot more for drinks, have to deal with who knows who that might be at the bar, not know how many songs you are going to be able to sing, not know if the host will take care of you or not, and not know who will be into it or just into chatting at their table. Or you can go to a closed group of friends, have everyone there for the same thing and be into what's going on, sing more songs, and possibly have a place to crash if you might drink a little too much. Granted, no one will get "discovered" at a basement party. But as a host, I always hated dealing with the "trying to get discovered" singers anyway..

Troy,
I believe that every area has it's own reasons for declines and increases too. There is no "one size fits all" answer. What you say could be a strong reason for your area, but here, that just doesn't fit. As mentioned, we had 7 bars back in the hay-day, now only 1 left. Our population during that same time frame has gone from 17000 county residents to nearly 25000 residents. Odd you say, that we should be declining in sales and attendance then? My opinion is this: habits are changing, spending habits and the fads or activities of what the people do (the people who have disposable income that is) have changed drastically. Instead of going to the bar when it's the weekend, they have home parties. Even when they do go to the bar, they drink at home first, then go to the bar and spend very little. They can be entertained by their smart phones or internet instead of being entertained by bands or karaoke. They don't drive nearly as much as they used to, since they can purchase things online. Many of the youth never even get a driver's license (I have 2 sons who don't have one, one 21, the other 22).

Bar life is changing here, and not for the better. The only places that are surviving are the ones with owners with deep pockets who basically "buy" their customers with gimmicks and huge promotions. Liquor laws have gotten tougher, and the fees the bars pay have gone through the roof. Then you add the factors of what is going on in the karaoke industry, it's not looking good for us in our area.

Rural areas are losing their populations to cities more rapidly than ever -

More Americans move to cities in past decade-Census - Reuters
http://www.reuters.com/article/2012/03/ ... AJ20120326

Fewer young people (Millennials) are driving, own cars or even have driver's licenses -

Young Americans Lead Trend to Less Driving - New York Times
http://www.nytimes.com/2013/05/14/us/re ... d=all&_r=0

Interestingly, the latter article notes (as do other studies) that the rise of the Internet means we have access to more from our homes which means we don't have to go out as often.

One of my best friends has 5 sons. The youngest is 23. None of the 3 youngest even have driver's licenses. They just have state issued ID cards. NONE of her sons has ever been to a karaoke night at a bar. Then again, none of them have ever done karaoke at home either.

I am sure that population migration patterns, access to the Internet, and other social trends are having a significant impact on bars and the entertainment they offer. This is more visible in rural areas where populations are decreasing.

But as I think back over the last 20 years of doing karaoke as a singer in more populous city areas (Dallas, San Diego, Seattle and the many places I have travelled) I don't feel as if much has changed in regards to the number of people that attend karaoke shows. There are always downward trends during recessions or other times where money is tight, but I have never felt as if karaoke is dying. I still don't feel that way. In fact, my last 4 weeks of karaoke have been the highest attended, most fun karaoke nights I have had.

The last month of karaoke has re-kindled my spirit and love for what I am doing. But it has prompted me to ask - why? I want to figure out why so I can build on that and hopefully create more success. Thus the reason for this thread as I am trying to analyze trends.

Thanks for the input folks!

-Chris

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-Chris

Agreed. But, the customers are still there. Economics tell us that as the demand dries up, only the strongest bars will survive (those that have good drinks, food, service, etc).

And, there are other factors in addition to basement parties. Stricter DUI laws, smoking bans, etc.

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I'm not a cheerleader, but I paid for my pom poms with my own money!

To add to that, I mentionedThis also created a problem with attendance. Since we travelled within the same circles, our loyalties became split. One had to decide whose show to go to, while hurting the feelings of the other (by not attending his/her show). We may have had shows on different nights of the week, but not all of us could afford to go out every night, thus, the dilemma of which show to go to. Where once, we were 20 friends all meeting to go out to one show, we were now 5 people here, 2 people there, 3 people at the other place, and 6 of us hosting (or trying to) our own show. In my previous post, I mentioned one of the factors for the costs dropping. Well, this was/is one of the factors for those costs not going back up... lack of attendance.

Exactly. This is probably not a problem in big, urban settings, but for many small-medium sized towns, this is exactly the case. Especially during the week when the potential supply of available patrons is at its lowest.

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I'm not a cheerleader, but I paid for my pom poms with my own money!