A Nashville technology company is seeking to revolutionize how people experience karaoke, and in the process open up new sponsorship and royalty revenue streams to a music industry starving for them.
Under KaraoQ, gone are the dingy binders of narrow playlists and handwritten song requests passed along to the DJ.
Instead, KaraoQ makes a night at Miss Kelli’s a slick, social media-based experience where patrons can rate other performers, pay a bumping fee to jump to the front of the queue and sift through a vastly expanded cloud-based song list. KaraoQ is already in use in about two dozen Nashville bars.
The application is free to download for Apple and Android smartphones, but generates revenues in a variety of ways. Besides taking 25 percent of all bumping fees and tips for the DJ, KaraoQ also offers endless opportunities for sponsorships and targeted advertising. The company has already lined up heavyweights such as Spotify, Uber, Jack Daniel’s and Universal Music Group as partners.
And, perhaps most intriguingly, its digital interface will make tracking and paying out royalties to rights holders a simple reality. A partnership with Knoxville-based DigiTrax Entertainment, which has developed a fully licensed, cloud-based playlist, will allow KaraoQ to pitch its application as a pathway to royalties for rights holders. Royalties from karaoke performances have largely been a black hole for the music industry even though recent estimates put the global karaoke business at $15 billion annually.
Finding a way to pay creators is especially important to the company’s CEO, Michael Amburgey, whose grandfather is legendary songwriter Don Chapel, whose credits include cuts for George Jones, Tammy Wynette, Conway Twitty and others of their ilk.
Amburgey founded KaraoQ last year, and his startup was one of the class members for the debut of Project Music, the music technology launch program from Nashville’s Entrepreneur Center.
“To someone like my grandfather, that stuff is important, to create transparency we don’t seem to have today,” Amburgey said. “Everyone talks about growing the record industry pie, and I think we need to create new pies. That’s what we’re doing.”
One of those new pies will be strategic partnerships with record labels and artists. If a patron, such as one of the 42 people who downloaded the app at Miss Kelli’s inside Printers Alley on Wednesday night, chooses to play a Kenny Chesney song, KaraoQ offers the chance to promote the country star’s new album, upcoming tour or even his line of Blue Chair Bay rum.
The agreement with Jack Daniel’s illustrates the possibilities on that front, according to Shawn Yeager, who mentored KaraoQ during Project Music and serves on the company’s advisory board. Yeager’s music tech firm, the Back Porch Group, also has entered into a strategic partnership with KaraoQ.
“I think everybody gets it,” Yeager said. “That goes to the ease with which one can understand the business model. It’s a ‘rising tide lifts all boats’ kind of approach. There’s nothing exploitive, nothing where it’s a zero-sum game. The partners, or the venues, or the DJs, they all profit when KaraoQ does. The value proposition to all parties are very strong.”
Reach Nate Rau at 615-259-8094 and on Twitter @tnnaterau.