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Defendants Named in the Sound Choice Lawsuit

Individual KJ Defendants

Karaoke Venue Defendants

Dennis Gorrel (Big D) Productions

Boston’s Bar & Grill

Debbie Simmons (Karaoke Fever)

The Breakroom

Trey’s Bad Ass Karaoke

The Grapevine

Abraham Cortez (Carousel Karaoke & DJ Co.)

The Hazelwoods First Place Sports Grill

"Dan Dan the Taxi Man"

Hurricane Bay Nightclub

William Ludlow II (Dirty Goat Productions)

Lighthouse Sports Bar

Greg Kimble (Dynamic Sound Production)

Regal Beagle Sports Lounge

Ernest McCullar (Wired for Sound)

 








Derek Slep, Cofounder, SoundChoice Studios
Are KJ's Killing Karaoke?
This Company Says 'Yes'

Posted December 2,  2009 Share/Save/Bookmark     

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“This whole affair is very insulting,” Dan Dan The Taxi Man writes on a DJ message board. One of 15 defendants listed in a lawsuit filed by karaoke song disc maker SoundChoice, Dan is smoking mad. As a customer of SoundChoice and a successful Phoenix area  KJ, Dan is furious that the company would not only name him in a trademark infringement lawsuit, but not even do enough research to find out his real name; he is listed on court filings only as John Doe#1, a.k.a “Dan Dan the Taxi Man.”  Dan insists that his library of over 9,000 songs – 20% of which are SoundChoice recordings, are all on legally purchased discs. Dan may be right, but for every legal KJ there are three or four who knowingly or unknowingly use pirated discs, and that is what SoundChoice and other karaoke music producers say will eventually lead to the death of the KJ and perhaps the industry.

Laptops and Shrinking Profit Margins

The Crux of SoundChoice’s argument is that illegally copied karaoke music drives prices for karaoke entertainment down artificially low, creates unsustainable losses for music producers such as themselves, and penalizes KJ’s with legal libraries. For instance, SoundChoice alleges in its federal suit that when it sells one disc on average, 10 illegal copies are made of it. This substantial loss of revenue has shrunk its workforce by 60 employees and inhibits the company’s ability to manage the costs of obtaining music licenses and maintaining its recording studio and distribution center located in North Carolina. Essentially, the ability for KJ’s to make multiple discs, sell copies, and/or use unauthorized digitized karaoke tracks usually purchased on laptop systems, is killing SoundChoice’s ability to make a profit.

SoundChoice contends that KJ’s who use illegally copied music generally offer an incredible amount of song choices to SoundChoice Studios in North Carolinathe customers they serve for much cheaper prices. The typical bar owner will no doubt choose the KJ with 50,000 songs over the one with just 5,000; and because the KJ with 50,000 songs paid maybe no more than a penny per track because the songs were (illegally) copied or pre-loaded on a laptop, he can offer his nightly service at a great discount, while the legal KJ must try to recoup the $1.50 per track that he/she paid for their library. With tens of thousands of songs becoming the new standard, KJ’s with more modest, but legal libraries are either left out in the cold or must resort to illegal copying to keep up. This is the vicious cycle of karaoke piracy; SoundChoice is looking to stop it.

The lawsuit specifically alleges trademark infringement and unfair competition. The unauthorized copying of SoundChoice’s trademarked discs amounts to the infringement and the profits received from use of the illegal copies are “unfair competition” according to the lawsuit. The named defendants in the suit could be liable for up to $200,000 for each “counterfeit mark,” (illegal disc) or up to $2,000,000 if the infringement was “willful.”



To Copy or Not to Copy

The typical KJ is not unlike most of us. He or she loves music and is hosting karaoke nights perhaps to make extra money. KJ’s who may be guilty of the type of trademark infringement that SoundChoice is alleging, are not dark, nefarious characters who buy their discs in a back alley somewhere. Instead, like many of us, they wish to make their digital libraries portable, so they copy their discs just like we do when we want to hear our favorite Taylor Swift tune in the car, on our Ipod, and on the home computer. We have been copying and sharing for years in the name of convenience. However, when a KJ does it, it is an action that affects commercial activity since he or she is being paid to provide a service. Thus, a copied disc for use in “multiple” shows could be considered infringement. Purchasing karaoke hardware and software products with thousands of pre-loaded songs is also infringement since these songs are almost always illegal copies of original discs.

 

Some may that the laws’ singling out of the KJ as “businessman” is unfair since the monetary effect on the music producer is probably the same since the loss revenue producers experience with the purely legal activities of the average person who copies discs for personal use is probably comparable to the loss revenue that KJ’s create with their activities, and music companies are just suing KJ’s because “they can.” 

The truth is certainly somewhere in the middle.  Karaoke music producers are losing money from disc copying; SoundChoice even claims in its suit that is now losing money on every new karaoke disc it produces. There is no doubt that it takes a substantial investment to produce just one karaoke track. After purchasing the copyrights and other associated licenses from the original artists, karaoke producers must then get together a group of musicians to record the music. The quality of the karaoke track will depend on those musicians’ ability to duplicate the original sound. That means that paying for quality talent and quality recording equipment. This critical investment is wasted if there is no profit in it.

 

Keeping the Rotation Going

On the flip side, the karaoke music industry seems to be failing to heed the lessons of the larger music industry which was painstakingly slow at adapting to the demands and practices of technology.  As new formats and uses for digital music became available, record companies still insisted on selling their wares the old-fashioned way. This led to ugly battles with Internet sharing sites such as Napster and other so-called enemies of the compact disc until they grudgingly gave in to the ITunes library. Digital music sales have now topped sales of Cd’s. Karaoke music producers should take heed of this painful lesson of the music industry and find a way to offer its wares in the formats that KJ’s desire.  As any karaoke industry veteran will tell you; 95% of all laptop karaoke systems are filled with tens of thousands of illegally copied karaoke tracks, but the laptop system itself is revolutionizing the KJ’s job. Laptops allow KJ’s to store and queue tracks faster and more efficiently, they remember customer preferences and automate the entire karaoke night.  Thus, if karaoke producers really want to stop infringers, it must offer a comparable replacement to the activities it wishes to banish, and attempt to satisfy the needs of its crooning customers; like Dan Dan the Taxi Man, who just want to keep the rotation going. 

 

 


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