WHO IS
KARAOKE WORLD ?
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WHO IS KARAOKE WORLD ? |
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Story in Calgary Herald - December 22, 2003
Sing a little tune for me Wannabe stars drive thriving firm Lisa Schmidt Calgary Herald Monday, December 22, 2003 Stan MacNeil, left, and Dan Chabot have turned their karaoke business, Karaoke World, into one of Canada's largest. When Dan Chabot and his partner, Stan MacNeil, started in the karaoke business more than 20 years ago, hosting a show used to mean plugging in an eight-track cartridge and handing a sheet of lyrics to guests to try to read in the dark. The equipment has come a long way since -- just slip in a disc and the words spill along a television screen in time with the music. But crowds' reaction to this sing-along form of entertainment have not changed a bit over the years. "It's still the same -- nobody wants to start and nobody wants to quit," says Chabot. The popularity of the entertainment -- now even drawing attention of mass merchants trying to cash in on the trend -- has helped the pair build their business, Calgary-based Karaoke World Ltd., into one of the largest karaoke companies in the country. "There's nobody close to them," says Ken Stuart, president of Singer's Choice, Canada's largest distributor of karaoke equipment, based in Woodbridge, Ont. "Their business is a unique operation -- it's rare to find a store that can exist solely on karaoke." Billing itself as "Canada's karaoke superstore," Karaoke World sells and rents out equipment and supplies and hosts a large circuit of shows in the city each week. MacNeil, 59, and Chabot, 52, are both easygoing and quick to crack a joke, claiming they themselves are "wannabe" singers. Chabot admits he did play guitar in a band that put on shows throughout Alberta and Saskatchewan for more than two decades, but "that doesn't mean I can sing," he says. Their operation started out in a small corner of Mr. Entertainment, a music retailer based just off Macleod Trail across from Chinook Centre, offering backup music and lyrics to aspiring singers, while hosting the occasional show at a bar or even house party. In the early 1980s, the systems were simple but cumbersome, requiring two people to host a show with eight-tracks or cassettes and photocopied lyrics. With the advent of better technology that synchronized lyrics and music on video, the trend started to catch on in nightclubs. In 1997, the pair made an offer for Mr. Entertainment, changed the name to Karaoke World Ltd. and abandoned the musical instrument business altogether. "We made a decision that we were not going to go that route," said MacNeil, adding there were many naysayers in the early years who dismissed karaoke as a passing fad and certainly not substantial enough to build a business on. The store was a spartan affair in the first year, acting as little more than storage space for rental equipment and a selection about 50 discs, as the partners built up their business around Calgary at different bars, clubs and pubs. "We had kind of an empty store and we went out and did shows," Chabot recalls. "We sold clock radios in the beginning." These days, the store sells as much equipment as it rents, with revenues split evenly between sales and shows. While the partners prefer not to discuss the financial details of their operations, they say it's been lucrative, but "a hell of a lot of work, too." The business averages 75 functions a week -- everything from weddings to corporate parties and high school dances. A four-hour show, with host, typically costs between $225 and $300, putting annual revenues from shows around the $1-million mark. The business, which started with MacNeil, Chabot and his wife, Marg, has five staff and up to 35 hosts on contract to conduct shows all across Calgary and the surrounding area. Karaoke World now boasts a database of more than 200,000 songs and is setting up an in-store computer system to allow customers to do their own searches. The store's website, up and running for two years, receives orders from a growing list of out-of-town customers looking for specialty songs or the latest releases of radio chart-toppers. In the early years, MacNeil said the shows mostly appealed to baby boomers, since the majority of the music available at that time was from that generation. But crowds are getting younger, especially with the growth in pop music releases, he said. "Even in the bars, we've seen the 18- to 25-year-olds really spark because now it's the cool thing to do," he added. The popularity of karaoke singing has brought some unexpected -- but not necessarily unwelcome -- competition in the market. Retail giants such as Wal-Mart Canada and Zellers have started selling smaller karaoke machines, mostly during the holiday season. "They all jump on board during Christmas," said MacNeil. "We do this year round." But interest from mass merchants also brings some mainstream credibility to the industry and possibly even some future customers who will get hooked and start collecting music, Chabot said. Piracy, on the other hand, is a growing problem for the business, with unlicensed copying cutting into as much as 30 per cent of music sales. The business promotes copyright education and is working with other Canadian retailers to promote the message. The store also tries to keep prices reasonable. "If you bring something at the right price, people don't feel they are being taken advantage of," said Chabot. lschmidt@theherald.canwest.com Small Business Karaoke World: - Is one of the largest karaoke companies in Canada; - Sells and rents out equipment and supplies and hosts a large circuit of shows in the city each week; - Sells as much equipment as it rents out, with revenues split evenly between sales and shows. Small Business Week: The Power of Innovation
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