Karaoke Forums

For those that missed the summit stream today, here is a not-so-brief summary of one session that was delivered today.

Ryan Sherr from PCDJ, did a demo of using the PCDJ Karaoki software connected to the DigiTrax KaraokeCloudPro service.

In a nutshell, a KJ pays a monthly fee for unlimited access to all of the tracks that will be available from the DigiTrax cloud service. I believe the number that was suggested was in the order of 60,000 tracks with duplication across multiple manufacturers. You can either stream from the cloud live, or you can temporarily store a local copy for offline use when no Internet connection is available. KJ's would be allowed to synch to up to 3 computers time, but only one computer at a time can be used.

The suggested fee during the presentation was possibly a $99 introductory fee with a regular cost of $199/mo. This would be "per system" which, when clarified, meant that running concurrent shows would require multiple subscriptions. Thus, if you are a multi-rigger with concurrent shows, you have to have a subscription for each concurrent show.

So....

If a KJ were to have 3 shows at 3 venues all on the same night, that would require 3 subscriptions at $199 each for $597/mo.

That is a LOT of money even for the most aggressive KJ/Hosting company. If you only have 1 rig/show running 5+ nights a week, then *maybe* $199/month would be worth it provided DigiTrax produces new music quickly and regularly. But the multi-riggers I know of, don't buy the exact same new music for every single rig they have in operation. They tailor it to the venue/crowd/location. Thus, a flat $199/mo might make sense for one location where it is way too much to spend for access to new music that will never be requested at another.

But lets keep it simple for now.... 1 Rig/Show

If a KJ runs it themselves (not hiring someone) and they get $125/night for a 5 night run at a venue, that means ~$2500/mo Gross pay. Which also means that 8% (@$199/mo) of the Gross pay gets chewed up with the cloud subscription.

But lets account for different wages -

5 nights x $200/night = ~$4000/mo = 5%
5 nights x $175/night = ~$3500/mo = 5.5%
5 nights x $150/night = ~$3000/mo = 6.5%
5 nights x $125/night = ~$2500/mo = 8%
5 nights x $100/night = ~$2000/mo = 10%
5 nights x $ 75/night = ~$1500/mo = 13%

...and for those who don't work 5 nights a week -

3 nights x $200/night = ~$2400/mo = 8%
3 nights x $175/night = ~$2100/mo = 9.5%
3 nights x $150/night = ~$1800/mo = 11%
3 nights x $125/night = ~$1500/mo = 13%
3 nights x $100/night = ~$1200/mo = 16.5%
3 nights x $ 75/night = ~$ 900/mo = 22%

The math is pretty simple so you can easily see where you fall into the mix based on nights and wages. The point is, the cloud subscription as proposed now is a fixed cost. The more nights you have and the higher your wage, the easier it is to absorb the cost. It is more valuable on months where a bunch of new, desirable music gets released and much less valuable in months where music sucks eggs.

Regardless, the cost is pretty much out of reach for the low wage/low volume operators.

If we look at it from the perspective of how much new music a host adds per month on average, and we use the preliminary results of the poll I posted, no one is spending $200/month on new music for a single rig. Since established hosts will already have an investment in music, there is nothing to gain from adding the cost of the cloud service except to increase the size of their library (which has a highly debatable impact on marketability).

This seems to suggest that established hosts have nothing to gain from adding the extra monthly cost to their business plan.

However, there are two groups of KJ's where this model does work out...at least in the short term.

New KJ's coming on the scene
Instead of purchasing a bunch of music up front, for a mere $199, they can set up shop and have access to a huge library that rivals many long term hosts. The potential for even more market saturation is very high and is something I view as a threat to wages across the board and to the future of independent karaoke hosts as a whole. Long term, I can see bars just setting up their own sound, paying the monthly fee, then hiring hosts at minimum wage to run the shows.

Pirates that want to avoid a lawsuit/go legit
See above. $199 and they are golden.

Of course, in both cases, as time goes on, the benefit goes down. For a few thousand dollars, a KJ can buy discs retail, on eBay/Craigslist, or from other KJ's and have a permanent library that they own outright. After approximately two years ($4776 in cloud service fees) they will have paid as much as what it would have cost to buy the content. Call it poor man's financing. Some will do it because it is the only means they have. The smart ones will figure out they are not getting a very good deal and either not sign up in the first place, or buy content elsewhere and drop the service. Accounting for the volume and wages calculations above, and it just doesn't make a very cost effective solution.

What DigiTrax could change

Lowering the cost is a double edged sword. Lower cost makes it more valuable to the long term KJ but also dramatically lowers the barrier to entry for new/pirate hosts increasing market saturation and driving down wages. This is a tough one to crack - balance value for established hosts vs market saturation vs sales/profitability for DigiTrax. I personally think they will do the latter. After all, the more they sell, the more they make, and I don't think they have a true grasp on what is "right" for the industry as a whole.

A few variations on a potential solution would be....

Offer a Trade-In Program for a reduce service fee. KJ's could trade in existing libraries in exchange for a "certification" and drastically reduced fees. This gives established KJ's "credit" for their existing investment while reducing the cost to access new content dramatically. I personally don't like the idea of giving up my discs....so an alternative would be.....

An audit, or, since that word has left a bad taste in many a mouth, some means of proving you own an existing quantity of discs and provide a discount based on what is already owned.

In both of these cases, it would be a high overhead/cost/administrative option for DigiTrax so i don't see it being implemented either. But I want to offer solutions along with my critique.

Another option......

Allow storage of existing physical library in the cloud.
Provide a "ripping service" to convert existing physical libraries into MP3+G and store on DigiTrax Servers. This could either be facilitated by shipping discs to them to rip and then ship back or even store in a secure location, or, just put a disc into a local computer and rip it to the cloud and keep the original locally.

The obvious problem with this is determining if it is an actual original or a burned copy, so some additional verification would be required. Since an audit would add in the administrative costs/headaches noted above, I don't see that as the solution. It might be possible to do scanning or photos. My bank allows me to scan checks and deposit them via the web, we should be able to figure out how to scan or photograph discs and deposit them to the cloud.



The final suggestion (and what I think is the best solution) is this -

Instead of coming to market with a 60,000 track library at $199/mo, Lower the monthly fee ($19.99 - $39.99/mo) but only provide access to the last 1-3 years of content. Established hosts won't be paying for access to stuff they bought 5, 10, 20 years ago, new hosts won't be instantly competitive with established hosts without investing in additional sources of music, and pirates can't simply go legit without any repercussions. DigiTrax could then charge a much higher fee on a one time basis, for access to older content. Maybe in the order of $1000 or more for access to 5 year blocks of music, or certain collections of older karaoke music. Package it up and sell it a la carte. Just don't offer financing for it as that defeats the purpose. Make people put skin in the game and put it on their own card or take out a 2nd mortgage or whatever the rest of the REAL karaoke hosts have done over the years.

I am trying real hard to see the benefits of using cloud over using the current standard of computerized systems, but the costs just don't play out without some real disruption in the market. I does have the opportunity to bring more legality to the marketplace, but it isn't going to do the already legal hosts any favors from a wage perspective. KJ Wages are more likely to continue to go down relative to the cost of the service. We *will* end up here, but we may be in for some real shocks and surprises on the road there.

-Chris

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-Chris

No matter the solution, you pay and pay and pay and come up with an empty hand. All the money you pay goes to Digitrax, and you own nothing for that money. Not a good investment. Whether you are collecting CD+Gs or MP3+G downloads, you are getting something for your money, so when you are finished, either you have discs to sell or files to sell, or just something to keep for your own personal use, or something to pass down to your kids. This Cloud nonsense gives you NOTHING for your money. It's only a win win for DT, and whatever other mfr gets involved. The hosts get nothing.

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I am the ONLY SANE 1 HERE

Nice job Chris.
That was a good read and you covered many sides to this "cloud" topic.

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Music speaks to the heart in ways words cannot express.

My prediction - They haven't found the gold egg yet! Look for the prices to dramatically drop after sales don't go the way of their expectations. I don't understand how they think they can get enough KJs to give them that kind of money.

I might do it under the following conditions:

Guarantee my songs will never "hesitate".
All the songs that are available are always available.
Offer the price of $15 per show ($199 per month is too steep if you don't have an every day show or even less)
Ensure I have all the latest updates every show.
Have a karaoke kiosk that is guaranteed to work every time

Not sure what I forgot, I'm in Toronto now and still suffering from "drive lag".


Other price options? Either a one time life time subscription price or a annual fee that is more in line with what I listed above.

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KingBing Entertainment C'mon Up! I have a song for you!!! [font=MS Sans Serif][/font]

How about the biggest problem, the internet. What do you do if for some reason you can't connect, the server goes down, etc. I do not want to have to rely on the net to do my job. The only thing I have to worry about is a power outtage and if that happens everything shuts down. If the net shuts down only you shut down.

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You can be strange but not a stranger

Smooth - You just don't get it and that is fine because not everyone will. The concept of "ownership" with regards to movies, TV, even print media like books is changing. Instant accessibility by anyone from anywhere to these types of media are eliminatng the need and the desire by the younger generation to "own it" because they can "get it" any time they "want it".

You don't own what you stream from iTunes, Zune, Spotify, Pandora, Netflix, Amazone, XBox Live, Hulu, or any of the other services. But can access it anywhere from just about any device on demand. So why would you need to have a permanent, physical original version? What value does it have to someone else that can also access it anywhere, anytime, from any device?

Yes, there is OLDER content out there that unless or until it gets converted, will have value in original pghysical form, but newer stuff will never exist in physical form. The only way to get it will be to download or stream it.

-Chris

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-Chris

Rip - From my first paragraph "You can either stream from the cloud live, or you can temporarily store a local copy for offline use when no Internet connection is available."

This addresses the "hesitate" issue.

To expand on this, I believe they said you would need to connect to the Internet every 3 days to have the system confirm you still had a subscription or the song would delete from the local storage the next time the software was launched. You can of course re-synch them locally after re-connecting to the Internet.

All the songs that are available are always available.

The advantage and promise of the cloud system is that every time a track is played, Digitrax knows, and can then pay the appropriate royalties/fees to the stakeholders. This is exactly what Apple does with iTunes, Microsoft does with Zune, and what Spotify, Last.FM, Pandora, Netflix, Amazon, etc. all do as well. It provides accountability for payment back to the rights holders based on usage. This *should* open the door to more attractive licensing by the publishers because they know they will get paid appropriately. Thus, it *should* mean that once on DigiTrax, always on DigiTrax. To be fair, though, the rights holders could still pull back since they are the rights holders. That is one distinct advantage to having a physical version of the content.

Offer the price of $15 per show ($199 per month is too steep if you don't have an every day show or even less)

Agreed. I don't know what the right price is, but $199 is not it. Even with my 7 days a week I have now, I can't justify it. I spend less than $50/month on new music right now and sometimes I spend $0.

Ensure I have all the latest updates every show.

This is a matter of having a connection at a show, or synching prior to a show the tracks you will need.

Have a karaoke kiosk that is guaranteed to work every time

I don't recall any mention of a Kiosk, but my assumption would be that the Kiosk would be a function of whether kiosk software exists for your Hosting software. They only demo'd the PCDJ Karaoki software, but they did say there was an API set availble for software vendors to connect to and integrate the cloud connectivty in with their software.

By the way, this is another sticking point for me. I use Karma and I am very happy with it. i don't want to change software and incur that cost along with the learning curve of figuring out new software and lose the data i have collected with Karma.

I suspect that many of the vendors will take a "wait and see" approach to what DigiTrax is doing before investing in software development costs. Unless of course, DigiTrax offers some incentive for the developers to get on board (which would be the smart thing for DigiTrax to do if they want to push adoption).

-Chris

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-Chris

thats a big downer..... something i would never be interested in at that cost.

for me in a small town i wouldn't make any money....

and the audio hesitation thing would drive me nucking futs because the internet service
here sucks unless your on cable and not everyone here is that smart. alot pay for the
basic 19.99 dsl 1.5mb service witch is shared... cloud is not an option.

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It's all good!

Please read...... There is OFFLINE storage so there would be NO HESITATION.

-Chris

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-Chris

Cloud levels the playing field for pirates even more favorably than GEM rental does - so playing field is level for content, no threat of lawsuits, no advantage for "certification", this just wipes out that entire concept. Now we're back to competing on price - who'll work for the least price. Yep, that will be awesome for the industry. Further, if I choose not to use cloud service, my costs are even less.

Thanks Chris, very informative.........what manu is the bulk of the 60k tracks, or how does it break down by manu?

There was talk during the conference of the manufacturers forming some sort of national certification, but they did not go into any depth on it. I don't see it happening.

The Cloud will level the field over time and we will compete on price and showmanship. Whoever can bring in the most people for the cheapest wage, wins.

-Chris

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-Chris

There was no break down of the manufacturers that I saw. There was mention of Zoom, SBI and I *think* Sunfly being involved. We can assume that their relationship to Chartbuster means we could see some of their material. Plus whatever they produce themselves.

-Chris

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-Chris

still not an option, my cable has a 50 gig cap, up and download. so i wouldn't waste my time downloading to store it on my system....

it's still not a good option.......

they don't take into consideration the host... the companies think of their best interests only... not everyone has the same abilities hardware & software or money....

just more reason to get out of the business.....

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It's all good!

Chris,
Thank you port posting this thread. It really covers and condenses the Karaoke Summit. Just so you are aware the option to "upload" your current ripped libraries and secure them within "your cloud" is an option now with the program (at least with MTU) I however am concerned as to how they will verify that a host does own what they are uploading. I will be posting some of my opinions and concerns as soon as I have processed all the info and cleared my mind.

Athena

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"Integrity is choosing your thoughts, words and actions based on your principles and values rather than for your personal gain."
Unknown
"if a man has integrity, nothing else matters, If a man has no integrity, nothing else matters."
Lee McGuffey

The same caps apply to anything you stream, not just karaoke. That is a battle you have to take to your ISP, not to the content provider.

If you do decide to get out. let me know. I will be happy to talk to you about buying your discs.

Chris
425-880-4118

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-Chris

...Watch out for him mighty, he'll work ya hard on a price. As much as he hates plastic his goal is to have as much as possible before their all gone...Just kidding!

Agree. ‘Nuff said. I never thought of that. Last week in the middle of the show we had 10 min power outage & they were cool about that. If I can’t connect to the net, I’ll be s**tooluck. The blame will be on me. Not good!

To Chris – you did an excellent job. Thanks for explaining things clear & easy to understand.

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To be fortunate enough to derive an income from a source as fulfilling as karaoke music has got to be as close to heaven as we can get here on earth!

I get it just fine. As for iTunes, I don't stream from iTunes, I download physical files from them. i have a song when I am done that I can record onto a disc, or add to an iPod. Cloud, you have no such thing. Cloud you have vapor. I am as old as you. I come from a time of getting something for my money. I don't want vapor. And when you talk about Netflix, you are talking about $8 a month, not $199 a month.

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I am the ONLY SANE 1 HERE

I missed Timberlea's post - But that is addressed by the offline storage. You have a local copy to play from and don't need Internet access....just power.

-Chris

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-Chris