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Sad but true:

Sybersound Records, Inc. Attacks Piracy in Karaoke Industry
           

   LOS ANGELES, May 13 /PRNewswire/ -- Sybersound Records, Inc., an
artist-run record company based in Malibu, California, has filed suit in
Los Angeles Superior Court and Ontario Superior Court in Canada, seeking more
than $200 million in damages arising from music piracy by karaoke record
manufacturers.
   Sybersound produces high-quality recordings for home-market karaoke use,
under product lines known as "Party Tyme Karaoke" and "Billboard Top 10
Karaoke."  Sybersound obtains karaoke synchronization licenses from publishers
for all of the songs released on its albums and pays royalties for all units
sold.
   The lawsuits allege that Sybersound's competitors have failed, unlawfully,
to license competing karaoke records, and have underreported sales to
publishers as a way of selling product below cost and undercutting
Sybersound's pricing.  These below-cost sales amount to unfair trade
practices, according to the suit.
   "This has plagued the karaoke business for a long time," said Jan Stevens,
President and CEO of Sybersound.  "We've always been scrupulous about paying
writers for the use of their songs, and have expected that our competitors
would do the same.  It's time for the rest of the industry to do the right
thing, and we hope that our lawsuit will help make this happen."
   Propelled in part by the success of such television programs as American
Idol, the home karaoke business has grown rapidly over the last five years.
Karaoke machines and karaoke CD+Gs are now carried by major retailers
nationally.
   The lawsuits allege that Sybersound's competitors infringe on copyrights
in several ways.  Certain popular writers, such as U2, Bon Jovi and ABBA, do
not permit karaoke use of their songs.  Nonetheless, many karaoke companies
include songs by these writers on their albums.
   In other cases, companies either fail to secure proper licenses or grossly
underreport sales to avoid paying royalties, the lawsuit contends.
   The result, according to the lawsuits, is that illegal karaoke products
are available at many of the major retailers in the United States and Canada.
"The last thing we want is for the retailers, who are Sybersound's best
customers, to be treated as copyright infringers just because they're misled
into selling pirated karaoke product," said Peter Haviland, Sybersound's Los
Angeles trial counsel.
   "We believe that Sybersound's competitors have been engaging in music
piracy and unfair trade practices for years," Haviland continued.  "We hope to
clean this up and collect substantial damages for the injury they've caused to
fair competition and to the image of the karaoke industry."
   Robert Meloni, Sybersound's New York lawyer and an internationally
recognized expert on copyright issues said, "Musical copyrights are the fuel
which powers the entire music industry engine.  Songwriters and artists, and
the music companies that finance and sell their music, directly suffer when
karaoke vendors violate those rights for quick profits.  But when the problem
is industry wide, as this lawsuit alleges, legitimate record companies like
Sybersound unfairly suffer as well since they are not able to compete on an
even playing field."
   Karaoke albums typically include new recordings of hit songs, with the
lead vocals omitted.  Sold as CD+Gs, karaoke records include graphics which
enable song lyrics to appear on a TV screen with the use of a karaoke machine,
as well as printed lyric booklets.
   The release of karaoke albums requires licensing for the reproduction of
musical compositions, for the synchronization of lyrics on screen, and for the
printed lyrics.  Since licensing fees can be as high as $2 per CD+G sold,
companies that avoid paying royalties have a significant price advantage over
Sybersound, which follows all the licensing rules.

   The companies named in the Los Angeles lawsuit include:

    *  UAV Corporation of Fort Mill, South Carolina
    *  Madacy Entertainment Group of Montreal, Canada
    *  Singing Machine Company of Coconut Creek, Florida (Amex: SMD)
    *  Audio Stream Inc. and Top Tunes Inc. of Hilliard, Ohio
    *  BCI Eclipse of Newbury Park, California
    *  Compass Productions of Minneapolis, Minnesota

   The companies named in the Ontario lawsuit include:
    *  Legacy Entertainment, Inc of Stoney Creek, Ontario
    *  Navarre Corporation Company of New Hope, Manitoba
    *  Direct Source, Inc. of Burlington, Ontario
    *  Direct Source Special Products Inc. of Lasalle, Quebec

   Sybersound CEO Stevens said, "We've found that our karaoke CD+Gs are being
purchased primarily by moms for their families.  It's great to be part of a
business that invites people to sing and brings music into their homes.  But
unfortunately, behind the scenes, the karaoke industry is corrupted by
competitors who fail to license properly and pay royalties to songwriters."
   The lawsuits allege, among other things, wrongful interference with
business, unfair trade practices and unfair competition.

   About Sybersound
   Sybersound is a privately-held record company based in Malibu, California,
that produces fully-licensed dance remixes, karaoke content, and original
records.  Sybersound is known for its top-quality production of music tracks.
The company's products are distributed in the U.S. by Universal Music & Video
Distribution, the U.S. sales and distribution arm of the Universal Music
Group.  In Canada, Sybersound is distributed by Sony BMG.  The company's
products are sold in most major retailers in the U.S. and Canada.  Information
about the products is available at http://www.partytyme.net.

   About Peter Haviland
   Peter Haviland is a trial lawyer who heads the entertainment industry
litigation practice group at Akin, Gump, Strauss, Hauer & Feld LLP, an
international firm.  Named a Southern California "Super Lawyer" by Los Angeles
Magazine and "One of America's Top Black Lawyers" by Black Enterprise, he won
a $132 million jury verdict for TVT Records in TVT Records v. The Island Def
Jam Music Group and Lyor Cohen.

   About Robert S. Meloni
   Robert S. Meloni is the founding partner of the boutique entertainment
litigation firm Robert S. Meloni, P.C.  He has specialized in intellectual
property and entertainment litigation for 25 years, handling matters for major
recording artists, songwriters and producers, music publishers and record
labels.  He is recognized nationally as the leading expert in copyright and
related issues in the karaoke music field.  He is the author of a number of
published scholarly articles on copyright, internet, and music industry
related topics and a former Adjunct Professor at New York University.



SOURCE Sybersound Records, Inc.
Web Site: http://www.partytyme.net

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Contact: Rick Priddis

(801) 785-0949




MUSIC PUBLISHERS ARE KILLING KARAOKE



           PLEASANT GROVE, Utah (May16, 2005) – When karaoke first appeared in the U.S., some believed it was nothing more than a passing fad.  Twenty years later, it’s still going strong, but finds itself battling an unlikely foe.  The karaoke industry is under attack from the big music publishers and many legitimate karaoke labels may not be able to survive the onslaught.

           “Under the guise of fighting piracy and copyright infringement, music publishers are strong-arming unfair fees from licensed and royalty-paying karaoke companies to the tune of millions of dollars,” said Rick Priddis, president of Priddis Music, Inc.  “I’ve been in the karaoke business for more than 20 years, and all of a sudden I am looking at the prospect of losing my company because of the publishers’ overly aggressive practices – and I’m not alone.”

           Unlike Napster, companies such as Priddis Music have been paying royalties under existing copyright laws.  Although the music publishers have accepted those payments for years, Priddis Music and other karaoke companies are now finding themselves under the Napster-esque label of “willful infringers.”

           When Priddis started his business, he used cassettes with the song lyrics printed on paper.  Mechanical or compulsory licenses were acquired for the recordings and reprint licenses for the lyrics.  Priddis Music based its entire business tenure on the terms of the Compulsory License Act and similar mechanical licensing through the publishers’ agent, the Harry Fox Agency.  When technology changed from cassette to CD, Priddis and other karaoke producers changed the lyrics from paper to a TV screen, with no background images or movies, to display the lyrics.

“The copyright law provides for compulsory licensing of sound recordings,” said Priddis.  “The publishers don’t seem to like the Compulsory License Act because it limits their control and regulates what they can charge.  With new technology for distributing music, the publishers have found a loophole in the outdated compulsory statutes and are using it like a sword.  They are evading the ‘pay-as-you-go’ terms of compulsory licensing and are demanding synchronization fees because they claim the lyrics on the TV screen are “synched up” with the music.  Now we are being told that we have to re-license all of our songs under synchronization licenses – with one-time up-front fees of up to $1,000 a song – or face litigation.  In our business, we have to keep as many songs as possible in our catalogues, whether or not they sell well.  With the prospect of re-licensing thousands of songs at a cost of millions of dollars, I don’t know too many legitimate karaoke companies who can pay that kind of money and keep their doors open.”

Priddis pointed out that the publishers are not above using force.  He had been doing business with Hal Leonard Publishing, Warner Brothers Publications and the Harry Fox Agency since Priddis Music began.  Under intense pressure from the publishers forcing the synchronization license issue, these companies simultaneously shut Priddis Music off from further reprint and mechanical licensing.

He noted that karaoke licensing is very different in the United Kingdom, where MCPS (the UK Harry Fox equivalent) is karaoke-friendly, not only offering fairly-priced mechanical licenses that include on-screen lyrics, but discounted pricing in order to encourage the karaoke market there. While U.S. publishers have agreed to the UK terms for UK karaoke companies, they are preventing hard-pressed U.S. karaoke companies from taking advantage of that program.  U.S. agents require import licenses in order to stop anyone that has not paid their exorbitant fees.

“When I started my business,” Priddis said, “I thought the Compulsory License Act was there to protect companies like mine that wanted to legitimately compete in the music marketplace, without coercion from publishers who try to squeeze out the ‘little guys.’  Now I’ve learned that the publishers will stop at nothing to make an extra buck.  Remember, these are the people who went after the Girl Scouts some years ago for “singing around the campfire” and gave the world unhappybirthday.com, where you are asked to turn in people who sing Happy Birthday without paying fees.

“The great irony in all of this is that the publishers, while claiming their actions are trying to root out pirates and willful infringers, are making sure that only the pirates will survive,” Priddis said.  “The true infringers have never paid fees and never will.  If this continues, those of us who have paid fees and royalties all along will be forced out of business, and then everybody loses.”

# # #

Usually when we are at Walmart we check the Partytyme cd's for new or tracks we dont have. After this post that practice will be a thing of the past. In fact I might put in a complaint in the suggestion box, or suggest other brands. (hint hint)
Its not hard to find the Walmart corporate web site....This wheel is gonna start squeakin...

Does news like this portend more profits for the greedy and less for us working people? God I hope not but fear that it will further stagnate an industry, spawn more laws that only affect the honest  working man whose money buys less and less. But the
ultimate result will be detrimental to the people who contribute mostly to the industry the artists and songwriters who have less and less control and are being represented by hooligans that dont even have enough scruples to join the mafia.

What goes around comes around and the natural and spiritual laws that govern will determine the final outcome in all situations but it sure is depressing in the meantime..
Whose finger was that Jd? (This reply could have been 40 pages long and reflect over sixty years of degradation in this great nation but the question is what can or should our meager little industry do about events like these? United we stand Divided we fall)

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Now remember these are only allegations for a lawsuit, nothing has been proven.

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Might I recommend you consider Karaoke Bay instead?  The quality of the tracks on KB are better than any other brand I've bought at a mass merchant.

And this lawsuit reeks of the same stench as the SCO lawsuits.  Likely driven by someone else (notice who the distributors of the Partytyme are?) so they don't get their name dirty.  They're use this lawsuit to get information on the licensing and if it's not paid there will be a second lawsuit by the copyright owner to collect.

I don't buy priddis or party time cd's. As long as Sound Choice is still around I could care less what happens to the other Karaoke manufactures. Acutually I wish they all would go away and cd+g's would go up to like $50, that would solve the problem of the cheap karaoke companies charing $60 a night and using solely Walmart CD+g's

If that happened the piracy rate would go even higher than it is now.  That's part of the reason people resort to it now, they can burn the disc themselves & multirig them (or sell them cheaper on a bulk scale - I see illegal burns on E-Bay all the time) & make a hell of an illegal profit.  If the quality discs were cheaper, the "cheaper" companies wouldn't stand a chance because their products wouldn't be purchased over the quality product of the same price.

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yep! Illegal vcds, illegal dvds, illegal cdgs.

and as for Priddis, I have a few of their discs. They're fine. I won't miss Music Maestro that much. I have a few of theirs, but to be honest, I settled with those, and just don't see the need to buy replacements for something that works just as well.

What dye says about Soundchoice however is completely off the wall. As as much legit as they are, they have been denied all sorts of licenses... they're playing the game by the rules of the current copyright laws, and guess what? Artist after artist are refusing the licenses! So if you're happy with SC, great! But it won't last! As the pickings continue to get slim, so too will be their product. Or they'll put out product that nobody else really will want, or the demand will be very low.

I myself haven't bought that many cdgs of theirs after the 8700 line. They've been concentrating on the whole artist aspect, and for my individual needs, it's been a wash! I never bought their pop or country discs, and only wanted their headbangers, amu, 70s&80s, etc. But when they only put out five of all that a year, that's all I'm buying!!

Hard to support that kind of manufacturer. So I've been getting the Top Hits Monthly lines (sixpacks) since 2004... and if some manufacturers are dying, I KNOW that the montlhly discs will soon be feeling the pressure, if they're not already!

My last trip to Las Vegas, I visited a "Karaoke Store" and unless I'm mistaken, all of the stock were burns and jewel case labels printed on an "inkjet".

(Just an observation)  LMAO

On average, 75% of karaoke CDGs have poor arrangements and and are not worth paying for anyway, making most stores a rip-off regardless.

Only the old Pioneer DKKs and laser disks were ever up to snuff in my opinion. Almost all the other companies distribute audio dreck.

Seeing that the music industry has been in a major funk ever since the advent of rap and hip hop, Karaoke companies best not sue each other.

They might give the songwriters unions a hint to change the rules so that they get paid cents on the dollar for each performance of their material sung---karaoke included.

In which case it would be only a matter of time before karaoke would suffer the same fate that befell illegal online music file sharing.

Then karaoke will become an expensive pastime beyond drinks and tips. If karaoke gets too big for its britches, the songwriters will have their hands out. So beware.

Songwriters are already paid for public performance.  Where do you think BMI, SESAC, and ASCAP fees are supposed to go?

I'm looking forward to distribution of karaoke tracks with the actual CD's or a label get on the ball and distribute karaoke tracks with the original backing.  They already have the masters - just drop the lead vocals, build the associated graphics and distribute.  Marginal increase in production costs (negligible if you think about it) would result in excellent karaoke tracks and increased revenue for the artists and labels.

Oh well, maybe one day they'll get it.... karaoke helps to increase records sales.  I've bought plenty of musical tracks because I was planning to sing a song.