Proving A Legal Karaoke Library Is Getting Harder All The Time

As karaoke music manufacturers take a stand against the piracy that is crippling the industry, they are faced with some very real concerns. How do they keep up with the technology that karaoke hosts demand while combating the same technology that is eating into their income and profits?

•  Illegal downloading from shareware sites
•  the sale of thousands of hard drives with 100,000+ songs already loaded,
•  CD-ROM's printed with Lightscribe-like technology being sold though internet auction sites
•  even the most legal looking stuff that is actually bootlegged from the legal originals of the manufacturer.

Just how is a guy (or gal) who wants to run a karaoke business the right way to know what is legal and what is not? How can one tell the legal discs when the manufacturers themselves can't tell the difference? The truth is it is getting harder to tell.

There appears to be three major American manufacturers of karaoke music still vying for a piece of the karaoke pie. Sound Choice, Chartbuster, and Steller Records still market their karaoke tracks and are taking a stand against piracy, each in its own way.  Of the three, Sound Choice is currently not producing new tracks. They have opted for selling what they have in more desirable formats to karaoke hosts who are willing to sign a lease agreement for the use of their library of music. Chartbuster now offers their entire library for streaming to your computer for a monthly fee and the purchase of the software program required to access them. They also offer SD cards already in the best format for computer karaoke shows. Steller Records, who markets Pop Hits Monthly, has chosen to add a "watermark" to their new tracks to enable them to determine if individual tracks are legally purchased.

I recently purchased the 10 volume set of Chartbuster Essentials to replace 6 sets I purchased when I first got back into the business last year. I had unknowingly purchased the first 6 volumes on SCDG where all 450 songs from each volume are formatted to fit onto one disc. When they arrived, the discs looked totally authentic. Each was in a case that had the Chartbuster logos and artwork (that was probably more realistic than the notebooks that the 30 disc sets come in). Each disc was pressed, not recorded on a computer (You can tell). They all had authentic markings around the hole in the center of the disc (usually proves authenticity). Yet I found through research, that there is a problem with the legality of these discs.

It seems Chartbuster entered into an agreement to produce the SCDG discs several years ago. The same discs were legally marketed for a while, and then Chartbuster invalidated the agreement due to non-payment. However, the masters were used to keep pressing the discs illegally. While there was a point in time that the discs were legal to purchase, Chartbuster has stated that any SCDG discs purchased after January 2009 would not be honored as legal in an audit. So, to protect myself, I purchased the sets of 30 to replace the questionable ones and make it easier to sleep at night.

I also purchased a collection of Pop Hits Country discs recently. I ordered the 2010 collection of 10 discs from a supplier. When I received them, they all came in jewel cases with the authentic artwork that is shown on the Pop Hits website. When I opened them though, I found discs that were burned onto CD's on a computer. I immediately became suspicious of possible fraud and emailed my supplier. However, I also looked up the return address that came on the package. The address came back to Steller Records. Emails from Steller tell the real story of what piracy is doing to the karaoke industy.

Computer technology is eating away the profits of the manufacturers who produce the music that we use to run our shows. The money we pay for our legal discs is used to pay the royalties to the producers of the music, the musicians who produce the music, and the company to make quality karaoke for us to use. But for every legal disc purchased, many more are distributed across the internet and across the world for free, taking business away from the karaoke producers. And you, the karaoke host, take it in the butt each time you lose a job to the guy with 200,000 songs who is willing to play for $100 or free beer.

So Steller Records has opted to decrease their inventories of discs they sell to their loyal customers in order to keep the doors open and the music coming. They have placed a digital mark on their music to be able to ascertain the legality of a track during an audit. While I don't know how that plays out on an illegal copy of those tracks, I at least am more at ease knowing that my discs actually came direct from the manufacturer.

I did run into this same  scenario with another disc I purchased and got the same result. So I guess this is the way the industry is going.

Now, take a look at your library of discs that you purchased over the last few years. Look at the songs that you paid to internet sites to download. Did you know that you can download tracks from some of the big name music sites? Did you know that those tracks are not legal for commercial use? Even the downloads offered on the manufacturer sites are not sanctioned for commercial use.

As your library continues to grow, the discs you purchase legally are becoming harder and harder to tell from the ones made on the computer next door. The manufacturers are looking for piracy in the bars and clubs and may ask you to submit to an audit to prove that you own a track on a legal disc for every track on every computer you use to run a karaoke show.

My advise to you - save your receipts. Save any and all correspondence with the manufacturers in order to protect yourself and prove to them that you are doing everything you can to combat karaoke piracy by playing fair. Also, make sure the people you deal with are playing by the rules. If you suspect a purchased disc might be illegal, call the seller to task. Call the manufacture if need be to assure that you are in compliance. And consider joining karaoke organizations that are working with the manufacturers to combat piracy and keep it around for all of us to enjoy.

Club Owners Need To Inspect What They Expect

Isn't it amazing how an organization hires and entrusts its manager to look out for its own best interests and then doesn't check to make sure it's interests are being protected? So many club owners are totally unaware of the consequences of hiring a "Karaoke Pirate." For those of you unfamiliar with the term, a Karaoke Pirate is someone who thinks it is OK to illegally download karaoke music off the internet for free (or from an unreliable source) and use it to run a commercial karaoke show (or many) for profit. I run it to it time and time again. Karaoke shows are a dime a dozen everywhere you go. An at least 9 out of 10 (probably more like 99 out of 100) of the karaoke hosts have not purchased a single legitimate karaoke CDG.  But now that everyone is running their shows from a computer, it can be difficult to tell the honest Karaoke Host (KJ) from the not so.

What that means to you as the owner of a night club trying to make ends meet or the Board of Directors at the local club is that you could be potentially liable for millions of dollars in damages and not even know you're at risk of being sued. But because there are so many people downloading songs and infringing on the rights of the karaoke manufacturers (not to mention the song writers themselves), the major manufacturers that have not gone belly up are on the prowl searching for venues like you who are hiring "Karaoke Pirates". And at least one has determined that there seems to be more money in suing than in producing new music.

Why are you responsible for the actions of these people that have no concept of fair play? Well, let it be said that the whole idea of having karaoke in your establishment is to bring people in to eat, drink, and have fun. The more fun they have, the more they eat and drink. And the more profit you make at the cash register. It's called commerce and it is illegally using other people's intellectual property for monetary gain without their expressed knowledge or just compensation. While that might sound harsh, that's just the facts.

The problem stems from not inspecting what you expect. As a club board member who is responsible for the longevity of the club for its members, you are responsible for making sure that the club operates in a legal manner. You are responsible for making sure your payroll taxes are paid. And your sales taxes. And your lottery proceeds are reported. But yet you let your manager choose the karaoke host who will perform for the cheapest rate, thinking that everything is just fine. WELL IT'S NOT!

There are legal karaoke hosts out there who have not only paid for quality equipment to run a show just like the Karaoke Pirates. But they also pay for an extensive music library purchased with the blessing of the manufactures because they got their fair share of the sale. At 99 cents average per track, the investment in an extensive library can be high - sometimes $20-30,000 for a KJ that has been investing in music for a while. Can you honestly look at your KJ and tell yourself that they can actually afford a library with 200,000 songs in it?

The next time a Karaoke Host stops by and asks to do a show at your establishment, instead of first asking how much and settling for lower than the last guy - Ask him/her to show you the library of disks they have for their show. The manufacturers require a 1:1 ratio of original (paid for) tracks for each and every track on each and every hard disk. Do they do more than one show at a time? Then they need more than one copy of each song.

Karaoke is a fun time for people. Some say it is the largest spectator sport in the world.  I would argue the largest audience participation event anyway. And don't let this frighten you into thinking that it's just not a good idea to run Karaoke shows. The point here is to "Inspect What You Expect". Ask the KJ to show the discs. Make a trip to see them if you must or make him bring them to you. Ask how many songs he has. If it's more than 20,000 and he runs his show from computer, be suspicious.

But remember that there will be someone at sometime in your audience that is working for the manufacturers and is taking notes. If he doesn't see discs, he will not ask to see them. He will take what he sees back to the manufacturers who will list both the KJ and your club as litigants in a trademark infringement lawsuit. It will be up to the KJ to prove he owns the tracks. It will be up to you to prove you had no idea that what he was doing was illegal. Being ignorant of the law is usually not an excuse.

There is one other thing to mention here. The manufacturers are not the only ones getting hurt by the Karaoke Pirates. Yes, the songwriters and publishers for sure. But even closer to home - The Karaoke Host that you turned down because his price was a little higher than what you were willing to pay. But don't you now think that a little more now is definitely a lot better than the possibility of a huge lawsuit later?