Karaoke in Japan is a veritable industry

Article  by  Mathieu GAULÈNE  •  Published 17.09.2013  •  Updated 17.09.2013
In 40 years, karaoke has become a veritable institution in Japan. Apart from the cultural aspect, karaoke is an industry in its own right that brings in a huge income.

Summary

In barely 40 years, karaoke has become an essential part of daily life for the Japanese and one of the most important leisure pursuits enjoyed in the Archipelago[+] NoteAccording to the White book of leisure 2011 published by the Productivity Centre in Japan (nihon seisansei honbu). Karaoke is therefore the Japanese public’s most popular leisure pursuit, for it apparently helps to release the stress built up through work.X [1]. Whether you go to karaoke with friends, the family, to sign a contract, for a few hours or all night, karaoke is now deeply enshrined into the nation’s social life. This cultural activity that has spread to the rest of Asia, achieving the same success, and partly to the rest of the world, produces significant income in Japan, although this income has been falling in recent years. Huge karaoke box complexes have taken over from little bars. They are less expensive and offer a standard format: by spreading to the population at large, karaoke may have lost a little of its soul.

Short history of karaoke

The term “karaoke” is a compound word made up from two words, kara (空), which means “empty” and oke for ôkesutora (オーケストラ) meaning “orchestra” or “musicians”. In essence, the idea is to sing, not accompanied by musicians, but by a soundtrack. Originally, the word referred to a way of reducing the cost of a live concert, by replacing musicians with recorded music.
 
There is controversy as to who the inventor of karaoke is, but some sources refer to the musician Inoue Daisuke, who supposedly invented the concept of karaoke in 1971 in Ôsaka. He started to get his clients to sing in his bar, accompanying them with a soundtrack recorded on a cassette. His bar, The Baron, was what is called in Japan a “song bar” (utagoe kissa), which is a sort of ancestor of karaoke. So, we can see that the idea of singing in a bar is not quite new; but Inoue introduced innovative technology.
 
Having seen the success of his idea, he developed a sort of juke-box that combined a cassette recorder and microphones: karaoke had been born. He then made eleven similar machines which he hired out to bars and clubs in Kobe. The irony of the story is that since he didn’t patent this invention, he made no money out of it, and it was copied by larger companies without restriction. In the 2000s, his little karaoke company, the running of which he had entrusted to his brother, went bankrupt. The patent of the karaoke machine has since been acquired by the Filipino, the late Roberto Del Rosario, president of the Trebal Music Corporation and creator of Karaoke Sing Along System in 1975. In the 1980s, this businessman won two court cases against Japanese companies, which enabled him to patent the invention[+] NoteMary Bellis, Roberto del Rosario, About.com Inventors.X [2].
 
At the beginning, karaoke combined a cassette recorder with eight tracks operating with an audio cassette, two microphones and speakers. The advent of the laser disc in the 1990s revolutionised the concept, by adding video. Until then, karaoke performers sang following the lyrics in a book: after that the lyrics came up on a screen. Then came the use of CD+G[+] NoteCompact audio disc with graphic data.X [3] followed by DVD. During the 1990s, the move towards electronic storage of data got underway. At first data was transmitted via a normal telephone connection, like Minitel (a sort of French teletext system using a little monitor. Karaoke systems were increasingly like computers receiving data via ADSL or fibre optic cables. Several tens of thousands of Japanese or foreign songs became accessible to the public. The latest model by Daiichi Kosho, the LIVEDAM, can hold up to 135,000 songs. Innovations have been added by way of sound effects to improve the voice of amateur singers, or by way of wireless touch-screen controls so that the songs can be programmed; this innovation came about thanks to a partnership between XING and IBM[+] NoteIBM, IBM and Xing Revolutionize the Karaoke Experience Through Collaboration, IBM press release of 29 September 2006. X [4].
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Overview of the main karaoke groups

 Of all the leisure industries in Japan, karaoke is the one that makes the most profit. Of all the leisure industries in Japan, karaoke is the one that makes the most profit. In 2010, the turnover of the entire sector was in the region of 8 billion euros[+] NoteZenkoku karaoke jigyô kyôkai (JKA), Karaoke hakusho 2011 [The white book of karaoke], June 2011, p. 9. X [5]. This is a very high figure if compared with the 2 billion euros made the same year by the Japanese film industry. We must, however, make a distinction between three types of company within this industry. The manufacturers that make the machines and the audiovisual content are those that make the lowest turnover – 635 million euros in 2010. The intermediaries hire out the machines and the songs, and provide various services to operators, in particular maintenance. These operators mainly do business with bars and clubs, whose main activity is not karaoke; their overall turnover came to 1.8 billion euros in 2010. Finally, the operators are the karaoke boxes or bars and clubs offering karaoke to the customers. With a total turnover of 5.6 billion euros in 2010, this is the most profitable sector of this industry. But as we are about to see, there is a trend within the karaoke industry towards integration, and several groups now include all sectors of this industry within one organisation.

Turnover of karaoke operators in 2010

 
Several large groups now share the karaoke market. The main one is called Daiichi Kosho. It was set up in 1973, and has incorporated all the sectors of this industry. Apart from producing the hardware – with the Dam series, the market leader since 1997 – and the software – video and songs –, this group also owns the large karaoke box chain, Big Echo, with 229 shops in Japan. With a capital of 111.8 million euros, it employed over 3,000 people in 2011. Its turnover increased slightly and reached 1.2 billion euros for the 2011 tax year. Since 2001, it has changed strategy, aiming at an elderly public with DK Elder, the aim of which is to bring together old people, and to get them to sing, because according to the group, “most surveys show that is it good for the health.” Daiichi Kosho understood, first and foremost, that with an ageing population, it was in the company’s interest to gear the strategy towards an older audience.

 
The various players in the karaoke market in Japan (turnover in 2010)


The machine of the XING group, the Joysound, was the karaoke market leader for a long time; but DAM machines came on to the market in 1994, and Xing was dethroned in 1997. It is still the leader for exports to the West and in particular to the United States. Its capital is estimated to be 64.5 million euros and in 2011 it attained a turnover of 32.6 million euros. In 2008, XING employed 600 people. It gradually turned towards the lucrative content market and has since become the leader in the production of karaoke songs for medium sized karaoke boxes and for karaoke restaurants and bars. It has also entered the market for the sale of ringtones for mobiles via its website “pokemero JOYSOUND”. In 2009, it was bought out by the BMB group, and with its JOYSOUNDxUGA combining machine and audiovisual content, it became the market leader for hardware in 2010, ahead of Daiichi Kosho and its DAM series. These two groups now compete, and between them, they cover the entire market. Xing also because famous for the creation of a video karaoke game Joysound, for the Wii console by Nintendo.
 
Apart from Big Echo, there are other karaoke box chains. This is the case for example of Karaoke Kan, set up in 1990. Its shop in Shibuya became famous after appearing in the film Lost in Translation by Sofia Coppola. It belongs to the B&V group, set up in 1984, and has a capital of 9 million euros and employs 2,600 people. Its turnover for 2011 came to 244 million euros. There are 118 Karaoke Kan in Japan that receive 17 million clients each year. More recently, with Manga Net Kan, B&V entered the cybercafé market, closed areas where for around 10 euros you can read mangas, use the Internet, watch films, have a shower ... and sleep[+] NoteManga-cafés are actually used by young people living precariously as a temporary place to stay.X [6].
 
The Shidax Community created in 1993 with 300 karaoke restaurants throughout Japan should also be mentioned. This group’s turnover increased in 2011 to reach almost 1.8 billion euros. The group also owns a chain of restaurants, Patina Restaurant. Finally, as proof of the sector’s dynamism, we should point out the creation in 2008 of the Koshidaka group and its karaoke box Manekineko[+] NoteThe maneki-neko in Japanese folklore, is a little statue of a cat lifting up its paw to invite good luck.X [7]. As well as having a chain of onsen (thermal baths), the group recently had the idea to launch a sort of karaoke capsule for one person, the One-Kara, in response to a wide-spread phenomenon in Japan where people go to karaoke alone. The business logic may be implacable, but we should be questioning this phenomenon which goes against the original spirit of karaoke, the idea of which is to sing together, eating and having a few drinks…
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What is the future for karaoke?

The karaoke market is concentrated in Japan and the large groups tend, year by year, to push the smallest karaoke bars out of existence, exactly like what happened to small local cinemas, which have almost totally disappeared to be replaced by large multiplexes.
 
This can be clearly seen, if we compare changes in the number of establishments with that of the number of rooms per establishment. Indeed, the number of establishments is falling in Japan, going from 14,000 to 9,000 between 1995 and 2010. Over the same period, the number of boxes per establishment went from 10 to 14[+] NoteZenkoku karaoke jigyô kyôkai (JKA), Karaoke hakusho 2011 [The white book of karaoke], June 2011.X [8]. We can then see fewer but larger establishments emerging. According to Kataoka Shirô, president of the “National association of karaoke companies” (zenkoku karaoke jigyô kyôkai, JKA), this “move towards greater concentration within the karaoke industry is inevitable”. It can be explained by the very affordable prices offered by the large chains, and by a restructuring affecting the whole night entertainment sector in Japan: small local bars – the sunaku and other pabu – are being increasingly replaced by izakaya chains. “Even the little kyabakura (hostess bars) are closing and being replaced by huge complexes over several storeys,” he added.
 
In fact, the karaoke industry in Japan may have slowed down in recent years, but this can be explained according to him, apart from the current economic crisis, by the closure of and the difficulties faced by small establishments. While the number of karaoke bars remains high, the overall turnover has been falling for ten years, and reached 1.8 billion euros in 2010. On the flip side, the number of karaoke boxes keeps growing, attaining a turnover of 3.5 billion during the same year. It should be noted that there is a third market for karaoke in Japan, namely motley places such as hotels, ryokan, wedding halls and even ... tourist buses. This part nonetheless achieved a turnover of more than 360 million euros in 2010 using karaoke in this way.

Translated from the French by Peter Moss 
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Photo credits:
- Main image: jimmy Alvarez / flickr
- Live DAM: R_YOU533 / Wikimedia commons
- Graphics: Mathieu Gaulène
- Karaoke-box: styrka / flickr
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References

Alain ANCIAUX, Ethno-anthropologie du karaoké, L'Harmattan, Paris, 2009.
 
Mary BELLIS, Roberto del Rosario, About.com.
 
Pico IYER, Daisuke Inoue, Time, 23 August 1999.
 
Zenkoku karaoke jigyô kyôkai (JKA), Karaoke hakusho 2011 [The white book of karaoke], June 2011.
 
Interview with Shirô KATAOKA, president of the "National association of karaoke companies" (zenkoku karaoke jigyô kyôkai, JKA), 15 March 2012.
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  • 1. According to the White book of leisure 2011 published by the Productivity Centre in Japan (nihon seisansei honbu). Karaoke is therefore the Japanese public’s most popular leisure pursuit, for it apparently helps to release the stress built up through work.
  • 2. Mary Bellis, Roberto del Rosario, About.com Inventors.
  • 3. Compact audio disc with graphic data.
  • 4. IBM, IBM and Xing Revolutionize the Karaoke Experience Through Collaboration, IBM press release of 29 September 2006.
  • 5. Zenkoku karaoke jigyô kyôkai (JKA), Karaoke hakusho 2011 [The white book of karaoke], June 2011, p. 9.
  • 6. Manga-cafés are actually used by young people living precariously as a temporary place to stay.
  • 7. The maneki-neko in Japanese folklore, is a little statue of a cat lifting up its paw to invite good luck.
  • 8. Zenkoku karaoke jigyô kyôkai (JKA), Karaoke hakusho 2011 [The white book of karaoke], June 2011.
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