How to Start a Karaoke Business

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Image of two women singing into a microphone

A Quick Overview of The Karaoke Business

Karaoke is a form of interactive entertainment in which amateur singers sing along with recorded music (and/or a music video) using a microphone.

The music is typically a well-known pop song minus the lead vocal. Lyrics are displayed on a screen, along with a moving symbol or changing color to guide the singer. In some countries, a karaoke box is called a KTV.

With karaoke becoming popular, it has formed a new language. For example, if you are the head of the entertainment, then you can refer to yourself as a “KJ,” or karaoke jockey.

For people who love anything having to do with music, being a KJ or a DJ is a fun occupation. For such professions, the person doesn’t have to be an outstanding singer, musician or a composer but still can serve in the entertainment industry.

Karaoke isn’t known for being on the cutting edge of technology. Pop in a disc made 10 years ago, and stare at a monitor as lyrics fly by.

You can set up your own karaoke restaurant, bar, or pub, as well as setting up at events, parties, bridal showers, and many other venues where entertainment is desired.

Skill Set:
  • DJ experience
  • Party-planning
  • Sound/music equipment
  • Knowledge of music, types, and popularity/trends
  • Run all equipment including soundboards, lyrics, etc.
  • Set up karaoke equipment
  • List of Common Business Skills

Employee and Job Consideration During The Start-Up Phase or In The Future:

Approximate Daily Hours Needed:

This job typically has longer hours that span from late afternoon to the wee hours of the next morning (approximately 2:00 a.m.)

Equipment, Supplies, & Services During Start-up OR In The Future:
  • Karaoke CDG Player  (if a disc system)
  • Amplifier and mixer or powered mixer
  • Speakers
  • Speaker stands
  • Wireless microphones
  • Large Screen TV
  • Component Rack
  • Disc storage system
  • Various cables and accessories
  • Van or truck
  • See Our Essential office Equipment
Monthly Expenses and Operating Costs To Consider:

List of common business skills

Licenses:

When publicly broadcasting any type of copyright protected media, someone must either possess a license or pay royalties in some way. Karaoke is no exception.

As a KJ, most of your performances will be in bars and clubs. In virtually all areas these establishments are required to carry a “blanket license” to cover their entertainment. This includes bands, DJ’s, karaoke, and even a jukebox. You are covered by this license when you perform in these places.

For other public venues such as county fairs, street fairs, malls, etc., you should consult with the organizer about “per event” licensing issues.

Also, if you are serving liquor and alcoholic beverages, learning the local laws and regulations is helpful. You will need to apply for permits and licenses then, not just for your KTV bar/lounge, but also for the liquor and alcoholic beverages you plan to sell.

Copyright law is primarily federal law; however, state-law governed contractual agreements can also affect copyrights. A must-read guide to licensing and copyrights is located at Burning Karaoke CD+G’s Or Computer Karaoke.

See Our Page on Licenses and Permits

Approximate Minimum Startup Cost:

The average startup cost may vary from a couple hundred dollars if you already have a lot of the equipment to thousands of dollars if you want new, top-of-the-line equipment. You can start off small and expand your music collection and equipment as you grow.

On average it could take about $5,000 initial start-up funds to start a first-class operation.

Tips & Considerations:
  • Burning “back-up” copies of CDG’s for use during a paid show or ripping your CDG’s into a computer for use during a paid show is illegal. If you make money on a copyrighted work, you must use the original disc(s).
  • Most importantly, you need some good quality equipment: a professional level karaoke machine, microphones, speakers, a monitor for the lyrics, a large karaoke music library, speaker stands, and cords. Some clubs have their own speaker system that you can plug into.
  • If you would like to cut down on your expenses, and on the amount of equipment you need to haul in and set up at each gig, a great suggestion is to look into The Song Station Karaoke Machine. This karaoke machine is high quality and provides a lot of features.
  • If you have a karaoke machine which utilizes a television to display the lyrics, you don’t have to provide the monitor. In some locations, you can get away without bringing the speakers, speaker stands, or the monitor, but very few clubs provide their own karaoke machine or their own karaoke music.
  • A dynamic personality to cheer on the crowd and get them going is a big plus! Also, a good singing voice is an asset, because sometimes you will have the first karaoke song to get things started!
  • Anywhere in the city where the nightlife is active is a perfect place to start this kind of business.
  • Go all out because using your imagination is where the entertaining begins. Bring a camera around and treat party-goers like stars for the night or give away magnificent prizes to the most talented singer, letting the audience decide.
  • You will need to be sure to prepare a checklist which has all the required karaoke equipment, karaoke songs, karaoke machine, and karaoke downloads (if required), along with a pen and paper to take down song requests.
Pros and Cons:

The Pros:

  • Fun to start and operate.
  • You have the advantage of being your own boss
  • You can travel
  • Completely expandable
  • Great for night-owls (evening work hours)

The Cons:

  • The equipment can be expensive
  • Songbooks take time and money to create, maintain, and update
  • It can be difficult to be taken seriously by other business owners (such as bar owners), thus you may have to struggle to get paid what you’re charging
  • Musicians’ unions can be hard to work with
Type of Customers:

Radio stations are candidates since they host promotional events all the time. Locate your local wedding planners, event planners, and party planners. Leave your cards with caterers, florists, wedding photographers, and videographers.

Your main customers are the venues that will host your karaoke services. This can include bars, restaurants and clubs. Don’t forget less-visible lounges like those in bowling alleys, hotels and restaurants.

Your secondary customers are the karaoke singers; you’ve got to provide a great selection of songs and good service to keep them coming back week after week. Usually, tips will also be part of your business income so it pays to be friendly, fun, and helpful.

Even your local churches and school districts may enjoy having a Karaoke Night fundraiser. Party supply houses might let you leave a stack of business cards at their registers.

Statistics:

In recent years karaoke can’t seem to find the right beat, becoming yet another victim of the 12-year downturn. A listless economy has wreaked disharmony in the karaoke industry, triggering a wave of consolidation among companies that make, sell or use karaoke equipment. Shirou Kataoka, who’s paid to survey the state of the industry annually, has been issuing some very sour notes (BNET).

While Karaoke isn’t as popular now as it was in the boom of the late nineties, there is still a lot of demand for this fun activity at bars, clubs, and special events around the country. While some bars have taken the time to set up their own in-house karaoke systems, many others rely on outside services to come in for their karaoke nights.

Resources

Equipment and Supplies:

Unify

AceKaraoke

Forums:

The Karaoke Forum

Associations:

American Disc Jockey Association

National Association of Mobile Entertainers

Books:

Don’t Stop Believin’: How Karaoke Conquered the World and Changed My Life

Hit Me With Your Best Shot: The Ultimate Guide to Karaoke Domination

Pocket Karaoke

Guide to Karaoke Confidence

Karaoke: The Global Phenomenon

Software:

Karaoke Software KaraFun

MP3+G Toolz