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?

IS YOUR KARAOKE HOST SUBJECTING YOU TO TRADEMARK INFRINGEMENT LITIGATION?

   If your club runs a karaoke show, you owe it to yourself to do more than just hire the next guy/gal through the door that claims to have a quality karaoke show. You could be subjecting yourself and your club to needless litigation by being proactive in your entertainment hiring.

This is the age of digital information. Computers have certainly made a lot of things easier in our lives. Look at what they have done for your business. As a bar, restaurant, tavern owner/operator, computers have allowed you to enter menu orders into a terminal that send the order to the kitchen to be prepared, allows you to keep track of what the customer has ordered, allows you to add desserts to the order even though the check was already printed. I'm sure there are many other ways the computer has made your life easier.

It's the same way for the karaoke host who runs your show every week. Carrying CDG's to every show was laborious job. Now he carries all his songs on a laptop computer that weighs in at 8 lbs. He can find any song by typing in a portion of the title or artist name. He can print out books, keep his rotation in order, add music in between singers, and even keep a history of songs for each singer for the next week's gig.

But is that same karaoke host (we'll call him KJ) putting you at risk for a law suit? WHAT????? you say? Yes, that KJ could be sued for violations from copyright law to trademark infringement if he has not purchased discs from the manufacturer of those karaoke songs. With computers comes the ability to download files off the internet. Some have found that they can convert those discs to files and then make the money back they paid for the discs by selling the digital files to others on the internet. Others have found that they can make easy money putting all those files on a hard drive and then selling it on Craigslist or Ebay for a couple hundred dollars. For each disc that the manufacturer sells with the expectation of making a profit, there are anywhere from 10 to 100 illegal copies of that song in circulation, being used by KJ's and individuals, some without any idea they are doing anything wrong. Remember NAPSTER? They paid millions in fines for allowing people to illegally download from their site.

So how does this affect you? The law states that if you know or are in a position to know that your KJ is illegally obtaining his(her) music, you could also be sued. And the fines can reach $150,000 per song to $2,000,000 per infringement. That's not saying anything about the possibility of losing a liquor license for willfully engaging in illegal activity. Scary, huh? Well, yes. But there are things you can do about it.

The first thing you can do is resolve to only hire KJ's that have a manufacturer's disc to back-up every song they have on their hard drive. How can you be sure? At least ask the question. I have and can show you that I have a disc for every song on the drive. And that includes the regular CD music that we play as a DJ. But what about the KJ that has more than one show going on at different locations? Well the law says you must have one disc to back up one copy on hard drive. That means two shows = two sets of discs.

But my KJ doesn't use a computer. He has all his songs on a player that doesn't use discs! A company by the name of CAVSUSA came up with a way to put karaoke songs on a player that didn't use discs. The CAVS players hold several thousand to 100,000 songs. They were sold with the songs but not the discs that kept them legal. None of the manufacturers sanction a CAVS player which is essentially a hard drive system without having a copy of the original discs included in the sale.

HOW DO THE LAWSUITS WORK?

The major force in protecting the interests of karaoke manufacturers is Sleptone Entertainment. Sleptone is the creator of one of the best and most renowned karaoke disc series in existence today - Sound Choice. Because of the digital age and the fact that they are a preferred manufacturer, Sound Choice contends that they have lost millions of dollars to karaoke piracy and are not sitting still. They are taking a proactive approach to stopping the illegal use of their music and the Sound Choice Logo.

Sound Choice has paid up front (as all legal karaoke manufacturers do) to the copyright holders (songwriters and producers) for the right to record the songs used in karaoke. Because they don't use the soundtrack from the original recording, they have paid musicians to re-create the songs that are as close to the original as possible. And they have been very successful at it as to be the most sought after. With all that upfront cost and the fact that 90% of the recordings in use have been downloaded for free, you can see why they are doing something about it.

Investigators have been scouring the country, going to karaoke shows. (They could be at yours any night of the week.) They will not let you know they are there. They may even sing at the show or just choose to sit and watch or start friendly conversations with the regulars. They will watch and see if the Sound Choice Logo is displayed on the monitor. Since many venues (that's your place) like to show the lyrics for the crowd, this makes the investigators job that much easier. He will make a list of Sound Choice songs that are being played. He won't have any problem knowing that discs are not being used because most karaoke pirates will be glad to explain how they got their music for free. (Remember I said Ask!)

  

Without a word, the investigator will leave and then the fun starts. The KJ, you and several others that got a visit in your area will receive a notice that you are being sued. While this doesn't necessarily mean that you will be taken to trial, it will mean that you need to respond, either yourself or through your lawyer. The KJ will have to produce the discs that were played that night and most likely even have to submit to a full blown audit of his systems. If it is found that you own the discs and the KJ is just working for you - then you are the one that needs to respond.

WHAT CAN YOU DO TO PROTECT YOURSELF?

Well, one thing you could do is stop running karaoke. But that's not the answer because you have a crowd of people that come just for that reason. If you stop, they will only go someplace else. But there are a couple other things you could do to keep you in compliance:

1. As mentioned before - ASK for compliance from your KJ. If he/she cannot comply by showing you their libraries on disc, then find another KJ. 
2. Register with the Sound Choice Safe Harbor Program. It is designed to help you by requiring the KJ to fill out a form and register with Sound Choice also before you hire him. He/she can't or won't - find someone else.
3.  Join The K.I.A.A. or other Association to combat Karaoke Piracy - They will also want you to require your KJ to register.
4. If you are the owner of the karaoke library - make sure you are in compliance and don't hire a KJ that will circumvent the system. Make sure you have the original discs if you're called for an audit.

All of these will help you protect yourself from lawsuit. If you do any one of them, you will probably keep your venue from being included in the actual lawsuit. But there is another side to any story and this one has another side too.

By sending investigators into these venues, Sound Choice has subjected their best customers to the inconvenience of the proving that they are in compliance. They don't know who to sue, so they sue everyone. That makes some guilty until proven innocent. While it serves their purpose, it tends to make KJ's think twice about using Sound Choice music at their shows even when they are legal.

By registering with the Sound Choice Safe Harbor Program, they say they will guarantee that they will not sue you if you follow their rules. But many legal KJ's consider the tactics used as an invasion of privacy. Using this method could mean you can't find a legal KJ to do your show.

Registering could also be like putting a target on your back and then providing Sound Choice a map with an arrow to your location on it. You are almost assured of a visit.

Karaoke is Big Business! At last report about $10 billion per year. Those of you that have held shows for a while know that it is popular with customers of all ages.

Many legal KJ's consider conforming audits to be an invasion of privacy. They think the Sound Choice is overstepping it's authority with the people that have faithfully paid them top dollar for their music. Now, subjecting those same people to audits and lawsuits to eliminate them is a violation of their privacy. They see the Safe Harbor Program and mandatory audits to join the K.I.A.A. a slap in the face and an attempt to "grab up the backfield and throw them out until you find the one with the ball". I personally don't know how this dilemma will play out, but somewhere along the line, I guess we all will have to prove our innocence to solve the issue of Karaoke Piracy.

 

Ridding the industry of illegal activity is important in order for manufacturers to continue to provide the best selection of music and keep it updated with the newest selections. Undoubtedly, it will cost all of us a little bit more to keep the karaoke pirates out of our establishment, but isn't it worth it to know that you are doing everything you can to run the quality establishment that you put all your hard work and money into? I know I sleep better at night knowing I'm doing it the right way. And I guess the only way to truly prove you're legal is to "prove you're legal"!

By the way, your disc jockey operates under slightly different rules. There is not intermediate for the cd's a DJ should be using. The BMI/ASCAP fees you pay each year protects both for the playing of the music and they do police the industry themselves. But Karaoke has to conform to the trademark laws because of the fact that the lyrics are displayed on a monitor or TV. Synchronization rights are not a problem for a DJ unless he is playing videos during his show.

Getting Your Music Ready For Computer Karaoke Hosting

 If you are planning to run your karaoke show from computer, you will have to do what is commonly called a "Format Shift" (commonly called ripping) of the files on your discs. The files on a karaoke "CDG" disc are a little different than the files on your standard music CD. And while you can certainly rip the songs off the CDG with a program like Windows Media Player, you will not be able to see the lyrics on the screen because the program can't find the lyrics files on the disc. That's because they have been put on a portion of the disc that standard programs cannot see. There are also a great many computer CD Rom players and burners that will not see the lyric files even if you have the proper program to format shift (rip) the files. If you have one of these drives, the only thing you can do is buy a new one that will read the files. The good news is that most newer CD ROMs will read the files and they are no longer very expensive. Out of the last six computers I have purchased, all of the drives were able to read the lyric files and thus were able to rip the CDG's to the proper format for the computer to use. If you need to buy a new one, make sure that it will read CDG's before you purchase.


I'm sure you are familiar with the term MP3. If not, that is the common format that the computer uses to save and play music files. It is a compressed format and does not use as much disc space for each file. The compression is done in areas that most people would not be able to notice that there is a difference between the original file on the CD and the compressed file on the computer. The karaoke industry has been able to use this format along with a file that contains the lyrics to transform the karaoke industry into a "state of the art" experience for hosts who run professional shows and the home karaoke enthusiast. By using the computer, the KJ can now find any program with a simple search by title, artist, or file name. He (she) can create a singers list and control the rotation automatically. He can change pitch or speed of the song for the convenience of the singer. He can keep a history on every singer to easily find songs they usually sing at subsequent shows. There are even programs to allow singers to enter their selections on a touch screen that automatically puts those songs in their rotation for the evening. But that's a story for another time.


So now you have all those manufacturer's CDG's that you've acquired over the years. You need to get them into the format the computer can read. You will need a program to rip both the music file and the lyric file to the computer. When complete, each song will have two files. The MP3 file for the music and the CDG file for the lyrics. Hence the format is called "MP3+G", the "G" standing for graphics. There are several programs that will do this for you. The best will also automatically "Zip" the files together. Most of the best host programs can "unzip" the files and play them so you don't have to worry about the two files getting separated.


One program that I use and find most professional KJ's use is Power Karaoke's CD+G burner. The program will not only allow you to rip your CDG's to the computer in MP3+G and Zip format (a couple others too) it will also take your computer files and burn them to a blank CD so you can create your own custom disc to take to a show where you want you sing. You can even copy a CDG disc to make a backup of your library if you choose. However, when you rip all your discs to computer, that becomes your user copy and the original becomes your archive copy.


It is relatively easy to set up the program and start ripping. There are parameters you can set as you learn to speed up the program and deal with issues on drives that may not complete the process on their own. One thing you want to know up front though is that the title - artist information is not on the disc itself. If you have an Internet connection, it will attempt to download the information from "freedb.org" or one of several other databases you can choose. If it finds the information, it will use it. If not, you will have to enter the information manually before you rip the disc. You can specify the speed of the rip. If you get some errors in the music or on the lyrics screen, you can slow it down and hopefully clear it up.

You also specify where on your computer you want to store the files. I save mine to a music download folder and then move them to a folder that is named the same as the disc (SC8523 or CB60032). Those files are sub folders for the manufacturer (Sound Choice, Chartbusters, etc.) All host programs will read sub directories so how you catalog is not so important. However, there are advantages to keeping all karaoke files in the same directory and "unzipping" them.


Once you have all your discs ripped to the computer, they are ready to be used to run a karaoke show with a host program or to create song books for your singers. Remember that copyright law requires that you to have the original disc in your possession. While you don't have to carry it with you, in this age of internet piracy, you may have to produce it to prove you own the disc. So store all your manufacturer discs in a safe place.


Be aware that this program is only for the CDG format discs. There are other formats out there that CD+G Burner will not handle. While it is the best at what it does, if you have SCDG's or DVD's or one of the other formats, this program will not work for them.

If you purchase SCDG's or CAVs discs, you will want to use Roxbox File Converter. It does a great job of separating songs from a disc with up to 1200+ files and will even eliminate vocals on a multiplex disc, but you cannot choose to save the files at 320KPS which is the optimum for MP3. I notice a big volume difference with the l92KPS MP3 files which you will have to adjust for in your show. They also don't seem to have the high and low end that the higher format seems to maintain.


Some of the manufacturers are starting to provide discs in the MP3+G format to save time in shifting files to your computer. If you download from the Internet, the files will most likely be in the Zipped format. But the jury is still out on whether these sites have the legal right to sell these downloaded files and whether or not you can use them in a commercial setting.