In an opinion piece, CNN.com covers the new trend of jukeboxes with mobile apps, and covers the debate over whether this is a good or a bad trend. They suggest that the “jukebox stroll” was a “hallowed part of the American experience”. Wonder if that goes for the stroll to the bathroom too, though for ladies it does seem to be more “experiential” than for men. They also posit that we don’t need another reason to stare at our smartphones. This one we agree with.
NSM is working on new ways to discover and experience music in all kinds of locations. And we are paying particular attention to using smart devices. But we really want these devices to help connect people within a venue, not distract or isolate them from it. To learn more about our work in this area, follow #jukeboxnext on Twitter.
Here is the article on CNN.com
Torrentfreak reported that a Texan bar at the Clarion Inn was fined $45,000 for hosting “pirated” karaoke songs, featuring Otis Redding, Willy Nelson, and Johnny Cash among many others.
This lawsuit was one of 81 total cases so far in 2013 dealing with pubs, restaurants, and bars that were sued for playing music without a proper license. Full story on Digital Music News.
A dirty secret of the jukebox biz is that, in at least some locations, the bar staff puts a ton of money in the jukebox. This is especially true in locations with little to no other entertainment and no background music. Nobody likes a quiet bar, and during slow times when maybe only a couple of people are hanging out and nobody is playing the jukebox, the bartender is faced with putting their own money in to keep the ambience up, or risking having people walk out taking their tips with them.
There’s nothing necessarily wrong with making employees plug some money into the jukebox, but should a bar owner really be giving 60-70% of their employees’ money upstream to the amusement operator and the network provider? Employees who feel like they are being taken advantage of are also more likely to turn off the jukebox entirely, and just plug their iPod or laptop into the sound system, removing a key revenue source for the bar’s business, and potentially violating copyright laws that could lead to substantial fines and penalties.
There are solutions available to bar owners to keep employees engaged with the jukebox without making them feel like they are being ripped off. One option is to just reduce the cost per play during slow times. If you know that your employees are the primary users of the jukebox during certain hours, set the price at 10 plays for a dollar. This gives the employee tremendous value for their money. Another option is to let the employees mark their currency in marker with their initials before they insert it into the bill acceptor. Then when the bar owner cleans out the cashbox, they pull out the marked bills, and give a rebate back to the employee, which can range from 50% up to 100% by returning the marked bills to the employee.
By engaging and rewarding employees with discounted or free jukebox play, they’re more likely to encourage customers to use the jukebox, and overall jukebox revenue will increase. This is a very simple strategy if the bar owner has the keys to the jukebox. Otherwise it requires buy-in and participation from the amusement operator. If the operator is resistant to this idea, ask for a two- week trial to see how it goes. Or bar owners can call NSM Music to arrange for a new digital jukebox, which comes with a flat fee music subscription and the keys to the jukebox, so they can do whatever they deem necessary to increase their bottom line.
The following comes from David Grimes of Digitrax Entertainment, a karaoke company headquartered in Knoxville, Tennessee, courtesy of Digital Music News. It further underscores the difficulty in licensing content in the US. David’s issue is primarily one of enforcement. If a company is going through the difficult labor by legitimately licensing content, but foreign entities are just dumping their unlicensed content into the market, that’s a shame. At NSM, we want our customers to understand the difficulty of licensing so they appreciate the value proposition of our product. We are not complaining however, as that difficulty acts as a barrier to entry for competitors and keeps the market sane. However, if foreign entrants, or other companies that are trying to skirt proper licensing channels, say by claiming SoundExchange exemptions, were to begin competing in this market, we would expect our content partners to step up. And I think they would.
“Right now, American karaoke labels are struggling to compete with foreign competitors who wield huge advantages due to archaic American copyright laws and lax enforcement of overseas restrictions. The National Music Publishers’ Association (NMPA) was made very aware of these issues at the 2013 Karaoke Summit; all we ask is to be able to compete on a level field.
When a foreign karaoke music company wants to release a new track, based on any popular song, they go to a rights organization, which administers karaoke rights in general, pay a nominal fee (usually 10% of retail), record and release the track.
In the United Kingdom, for instance, this is done with a simple KAR license from MCPS, through PRS For Music. PRS is the “rights organization”, doing the administrative work of collecting fees and distributing them to the appropriate song publishers.
In the US, the story is very different.
In the landmark ABKCO Music, Inc. v. Stellar Records, Inc. case in 1996, karaoke in America was defined by the courts as an “audiovisual work”, forcing domestic karaoke companies to secure a “video synchronization” license, a lyric reprint license, and mechanical recording license in order to release a karaoke song.
There is no rights organization for video sync.
Video sync licensing in the USA requires the explicit permission of the song publisher, meaning the American karaoke company has to hunt down each song writer or their agent individually, and secure a license under contract, a time-consuming and expensive undertaking. This is completely at odds with the transient nature of song popularity; by the time songwriters have been located, negotiated with and signed to a contract, the song in question has long disappeared from the charts and the window of opportunity closed.
In addition, there are thousands of popular songs that simply can’t be produced domestically at all, because the songwriters have decreed their songs will not be made into karaoke… in the USA.
But nothing prevents overseas companies from ignoring these edicts, securing a compulsory license from a rights organization, and releasing music from these songwriters and artists. And it appears that nothing is keeping them from selling those works in the United States, in spite of the fact that the licenses they’ve obtained explicitly don’t cover sales into the USA.
For example, the UK license noted above from MCPS allows the company to sell anywhere in the world – except the USA and Canada. It would be a trivial matter for foreign companies to geo-block US IP-addresses and comply with their licenses, but the dirty truth is that the money is just too good. Red Karaoke, based in Spain, recently noted in an interview that about 50% of their revenue comes from the US. The company claims on their website that “we have licenses and agreements with the copyright entities and music publishers in the countries where we operate.”
However, a quick look at Red Karaoke’s catalog shows an enormous number of songwriters who are on the forbidden list in the USA, including Bruce Springsteen and Paul Simon, freely available to users from inside the United States. Additionally, the site uses the original album cover art and artist likenesses, rights that presumably would have to be negotiated with the original record labels and the artists themselves, respectively.
At Digitrax, we’ve identified nearly thirty other entities operating outside the US and trafficking karaoke songs back into the USA that American companies are forbidden by law to sell. Unless the playing field can be leveled, we three surviving US karaoke labels are going to have a rough time.”
Digitrax Entertainment, LLC
Some of the newer jukeboxes on the market offer Karaoke. Every NSM digital internet jukebox, as well as Touchtunes’ new Virtuo, are capable of hosting Karaoke. While a jukebox can never replace a qualified and engaging Karaoke host with a loyal following for an official Karaoke Night in a bar, it does offer up some interesting and potentially profitable benefits than many bar owners don’t think about.
Karaoke is a great party activity. By offering a Karaoke service to potential party customers, especially corporate parties, bar owners can increase their service offerings without having to dramatically increase their expenses, maintaining their profit margins. The best Karaoke experience is a hosted one, and most companies would gladly offer the job of Karaoke host to one of their more outgoing employees. Or maybe someone on the bar’s staff has the personality and desire to play host. Either way, using the jukebox to increase party business is good for the bottom line.
Another use for Karaoke is to create themed events. Jamie at the 540 Club in San Francisco hosts several themed Karaoke parties each year with great success. Their Catholic School Karaoke party has become a perennial favorite and always packs the house.
One of the benefits of Karaoke in a jukebox is that it can be turned on at a moment’s notice. This can come in handy when a group shows up on a slow night and there’s not much buzz happening in the bar. Offering to turn on Karaoke and letting them take control, potentially keeps them engaged, drinking and eating instead of moving on to the next bar looking for excitement.
NSM’s entire line of jukeboxes comes with a Keno/Bingo game. This exclusive application is a great way to promote food and drink specials or create bounce backs for happy hour or other promotions. The jukebox auto-announces the numbers, which are also displayed on screen and on any external TV’s that have been hooked up. It’s simple, fun and effective.
Creative bar owners run the Keno game during lunch hours and happy hour. Bar staff pass out free Keno cards and pencils to patrons, and offer prizes redeemable during a bounce back visit. These prizes can be used to promote new menu items or new drinks and slower day parts. Promotions like ‘Free Cheese Sticks after 9PM on Weeknights’ can potentially drive return visits during slow hours. The prize should always be redeemable during a return visit, and promoting a new item builds awareness of that item during busy times.
Keno is also a great option for corporate and birthday parties. Locations that do corporate party business can use it to engage and entertain the attendees and give out corporate swag as gifts.
In addition to promoting a bar’s own events and specials, savvy bar owners with relationships in the local business community are selling advertisements that they run on their jukebox-connected TV’s. Several bar owners are charging $20 a month per business for up to 10 businesses, which pays for their music fees. REALTORs, Taxi Companies, dry cleaners, and other service providers are great targets. One way to build a target list is to see who is advertising on other out-of-home media like bench ads, grocery store receipts, or even the bathroom ads in the bar.
Some bar owners use jukebox ads as trade-out inventory for their service providers. Every bar needs occasional appliance repair, plumbing, electrical and carpentry work and an advertisement for that business on the jukebox can cover the cost of simple repairs and maintenance needs for the bar.