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?
