Don't expect to hear slick recreations of the latest hits by Lady Gaga or Katy Perry at your local karaoke bar anytime soon — Sound Choice, one of the companies that was once responsible for 70 percent of the note-for-note reproductions of songs specifically made for drunk people to warble in public, is scaling back. Revenue for the company is way down, according to Seattle Weekly (via the Daily Swarm), as karaoke establishments have begun obtaining the music through illegal file sharing, forcing the North Carolina company to reconsider its business model.
Recently, Sound Choice has been investing its money not into recording but into lawsuits, aggressively pursuing venues and KJs (karaoke DJs) who use its music illegally. In the Washington area alone, Sound Choice has gone after more than 40 defendants, offering amnesty to those who will delete the pirated tracks and purchase legit versions on CD for a few thousand dollars.
That last stipulation — purchasing a CD — it turns out has been a major contributor to the karaoke company's problems. Music publishers are slow to offer licenses to downloads of karaoke tracks, the Seattle Weekly reports, forcing companies like Sound Choice to offer CDs only. The individual karaoke tracks people can buy on Amazon are licensed for home and personal use only. Moreover, karaoke clubs have been facing unclear policies about what they're paying for; many venues pay fees to blanket music licensors like BMI and ASCAP for the music they have on their regular jukebox, but that money doesn't go to karaoke producers like Sound Choice.
One solution might be the emergence of a Spotify- or Rhapsody-like on-demand service. A company called DigiTrax is launching one called Karaoke Cloud soon coming at a cost of $199 a month. But according to Chris Avis, a KJ quoted in the Seattle Weekly article, this would only appeal to KJs who make enough money to cover its costs. Until then, Sound Choice's CEO, Kurt Slep, says he's figuring out a way where he could sell hard drives directly. If that doesn't work out, it looks like we'll be "Rolling in the Deep" for a very long time.