Karaoke Forums

This is a question I have longed pondered, if the end of the independent owner operator is becoming a reality of the industry? Is the future of the karaoke business a few hosts with the business savvy capturing the bulk of the business and pushing out the independent owner/operator. It would seem that developing a large scale operation whether legal or illegal is the wave of the future. That the little guy would have a hard time competing and would eventually have to quit or work for minimum wage for the large scale operator. Is this the future?

I would like to see what your data points are. I see no indication in my area that large operators are taking over or pushing out smaller operators. The small operators that are leaving are either burnt out or retiring.

-Chris

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-Chris

You know and I know Chris no agencies keep data on karaoke, it is not important enough. The only data seems to come from the legally active manus. That data of course is tainted to push their various agendas. From personal experience I have know a few hosts that have been pushed out of their steady gigs, by large karaoke contracting operations. There is a very large concern in L.A. that have made inroads in the Riverside area. There is another large contractor in San Diego. They install their own systems, hire their own operators and do this at a set price.

I recall I posted about a friend of mine that lost a long term gig to one of these large operators. He moved on and got another gig and the same operator followed him and repeated to process. This friend was good but the large operator managed to under cut him on price, due to scale and hiring a minimum wage host. A college student who is quite a good singer as well. This friend Dennis has not managed to find another job this happened about a year ago.

Lots of variables....multi-rigs legal, illegal with entire music pirated, illegal with one set of music copied for multiple gigs on same nights. The investment they make, improves their chances of pushing the little guy out. Not much help from the karaoke manus for the little guy, so I'd say it's mainly the illegal ones that do the most damage. A personality is hard to replace at minimum wage, and sure once in a while you can hire a good karaoke worker for cheap, but it's the exception, and not the rule IMO. You have to make yourself irreplaceable.

This seems to be one of the few things we disagree on Lone, but then of course, I can only speak regionally. Here in northern NJ- a fairly densely populated area- it seems to be just the opposite.

Many of the largest Multi-Riggers ( and I mean legitimate) have either crapped out or downsized. One reason is that an independent is better equipped to compete in this economy.

Simply put, all monies from all shows go back to the business owner- not to hired hosts. Also, (legitimate) music expenses, transportation, equipment, etc. are minimized, creating larger profits from the back end.

In a GOOD economy, the multi-rigger negates all of the above by having more shows.

However, in a BAD economy the single-op comes up with a much higher profit PERCENTAGE per show.

Why? Because equipment, music, and maintainance costs do not drop at a rate commensurate with the economy. The PERCENTAGE of costs thus remain higher with the multi-op who-at this time- may not be able to pull enough shows to keep all of his rigs working full time.

In other words, a single-op can make a higher profit percentage than a multi due to lower business costs as well as more pricing flexibility to bring in more shows.

...Or maybe the single-op simply puts more into it because if he/she isn't working, no one gets paid. Who knows?

Either way, in my area multi-ops are dropping like flies...

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"No Contests, No Divas, Just A Good Time!"

" Disc based and loving it..."

Well wait a minute Joe. I'm a multi-op (not karaoke but bar game shows). I've invested several thousands of dollars in equipment, because I provide all my hosts with a cart, a laptop, powered speaker, speaker pole, mixer, microphone and other miscellaneous pieces need to run their shows. I contract with bars and restaurants to run my shows in their venues, and I subcontract my hosts to run the shows for me. We get between $125 and $175 for a two-hour show. I pay my hosts $50, so I make $75-$125 per show. We currently run 40 weekly shows in two states, so do the math. I started this business in 2011, the worst economy in decades, so I can't wait to see what happens when it recovers.

The multi-op does have some advantages, in many cases, some bar owners want to work with a larger company who provides training to their hosts, company t-shirts, brand new equipment and professional level entertainment. We don't allow our hosts to eat, smoke or drink alcohol while working, and all our events are family-friendly, even the late night gigs, so you can see how these things would be attractive to owners. When you see some of the people we compete against, it is fairly easy to gain market share, sometimes simply because we have a reputation of showing up and starting on time.

Additionally, I don't depend on just a handful of clients to stay in business, if we lose a couple of locations, we can usually replace them within a week or two. Also, the number of private events we book from the public events just add to the mix. So while I can see the single op has some advantages (some days I'd like to be doing just that myself), I can create so many more opportunities for additional income with multiple shows in the marketplace.

If the multi-riggers really bought or rented their libraries up front, you might have a point there Joe. Most I see in my area go out and spend their money on the rig, the promotion, etc. but the library? Why pay for what you can steal without any real risk? And how many web sites do you need to design? How many logos do you need? How many ads do you need to run? Everywhere you look the potential for economies of scale exists.

$7000/rig to make Sound Choice go away IF they happen to catch you (which is highly improbable) for a relatively small multi-rig guy running say 10 shows a week - that generates $8000/month... Even if they catch every one of your rigs, you can put aside that much money in less than a year to cover future settlements or you could just start buying up karaoke collections and how long till you transition to a legit operation for pennies on the dollar?

If you start out as a pirate and then start to buy up collections, how long till you can transition to legit at say $2/disc without even having to pay Sound Choice a penny? I'm crazy not to be a multi-rigger...

To Rick: Please note that I specified MY region, and can't speak for others. Multi-riggers ARE dropping like flies here. My thoughts on why were just opinions- I really have no definitive answers.

Jer: Yes, if one is speaking of pirates, then both Multi and single-ops get a higher profit margin. I was mostly speaking of not music thief hosts.

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"No Contests, No Divas, Just A Good Time!"

" Disc based and loving it..."

I don't see it as this big problem around here. Not everyone wants to deal with a big corporation. Many want to know that you are loyal to them and will stick with the smaller guys. I know my Wednesday/Friday venue has no use for a big company. They like me, cause I am very personable, and I take care of their needs at a reasonable price. They also know I am not going to walk away from them for another gig, because I am just not that kind of person. I will work other nights at other places, as I do now, but I won't walk away from a steady customer, even for more money. That is called integrity, which many larger companies lack. I said MANY not ALL.

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I am the ONLY SANE 1 HERE

I'm not saying large operations will work everywhere Smooth. It would seem that more hosts that are looking to the entertainment industry as their sole source of income, would be drawn to the large scale karaoke operations type of business model, laid out by Chris, and the game business of Rick. There will still be small towns and hamlets where scale will not work, but in large markets, especially with chain restaurants and bars, I can see venue owners impressed with a large operation. That is why the small independent operation has to work harder creating a friendly atmosphere. Something large operations usually don't generate.

i think each has it's place. those that want larger ops can go to those multi op companies. others, like the places Smooth does, prefer the single owner operator style. the ones wanting larger ops wont go to Smooth, and the ones that Smooth has wont go to a multi op company. both can exist together.

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Paradigm Karaoke, The New Standard.......Shift Happens

One thing I will agree with Joe is it is hard times for even the large chain restaurants and bars. Many of them have gone under and naturally the large scale karaoke operations that contract with them have lost business as a result of a slow economy.

That business can always be replaced, even if by doing private engagements.

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I am the ONLY SANE 1 HERE

Again, the example Lone Ranger offers up has been taking place off and on for over a decade. Large oeprators come along, pick up gigs, and single ops lose gigs. Then a large operator moves on or implodes and singles ops come back. The serious single operators hand around while the fly by night operators to exactly that.

In larger geographies this is the natural ebb and flow of karaoke and is not a new thing. I have been watching this happen in the Dallas area for almost 20 years. I didn't see it in SoCal so much from 2001 - 2006 because we didn't get out to karaoke as often. (I travelled a lot and it just wasn't convenient to go from where we lived). But I have seen this pattern in the greater Seattle are over the last 7 years.

In smaller geographies, it tends to be more single op anyway so we don't see this nearly as often.

I guess the point I am making is that Lone's suggestion that "the sky is falling" for single rig operators is real, but isn't new nor is it the end of small operators. They will always be here and there is plenty of room (in high population areas) for both ro peacefully co-exist.

-Chris

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-Chris

I can vouch for that for my area. By and large, karaoke out here is done by single op almost exclusively. There is one larger organization, at least four completely independent operators, and one duo who keep their money and gigs separate but work for booking each other. This is a territory taking in three "cities," one town, and a few tiny village type places, covering roughly fifty square miles or so.

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Co-host of The Greatest Song Ever Sung (Poorly), a karaoke-themed podcast

Chris I never said "the sky is falling", I merely posted a question to see what hosts opinions were on the matter. Evidently you feel the future is with the large scale operator, because that is the business model you are employing. I don't think it will be the end of small operators, but they will be under increased pressure by these large contractors as more single hosts decide to go in that direction like you have. I have noticed in my area an increase in large scale karaoke contractors and simply stated my observations. Ten years ago there weren't any, I'm just wondering if their market share will continue grow. I don't think you would get into a business with no growth potential.

"The Death of the Independent Karaoke Operator/Owner" isn't sensationalistic?

Evidently you don't read what I write. The future of karaoke is going to be changed by factors other than whether it is hosted by an singel rig host or a large company. MY future is to be a large company and I will happily co-exist alongside single rig operators. Just the way it has been for almost 20 years.

-Chris

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-Chris

You won't live peacefully beside hosts that you suspect are pirates. You admitted that they are fair game. It is still not apparent how you are going to divide the legal from the illegal. If you have some fool proof way of doing that you should share it with SC and PR both. Haven't you indicated that it would be open season on pirate shows? So now the host not only would have to prove to the manus they are legal, but also to any large scale karaoke contractor that might be looking at taking over their gig. At least the the large scale contractors that care about even asking before encroaching.

Brian, that could go BOTH ways. Yeah, while there may be pirate single ops, there are DEFINITELY pirate large companies. It is MUCH easier for a single operator to prove they are legit than a big multi-rig company. If my venues want to see my discs, I can show them in the space of a few minutes, then share with them the websites I buy from. Done, proven, all is well. A multi-rig company has to drag in all those discs, if they TRULY want to prove themselves. If I had a venue, and I were to hire a major multi-rig company, knowing what I know now, I would make them drag in EVERY disc they owned. If not, sorry no business for you.

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I am the ONLY SANE 1 HERE

My point is Smooth what authority gives any of these large scale karaoke operations to question any host, or to try and undermine their business? I don't care if they are legal or illegal they are not the law, for a matter of fact neither are the manus. They have assumed the role of the legal authorities, in the case of the large scale contractors they even have less legal standing than the SC's and PR's of the world.