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“Three things – American Idol, American American Idol,” said Vogt, who along with his brothef Doug, have been in the business for 18 yearse withtheir companies, Hilliard-based and AudioStreamj Karaoke. The uber-popular TV singinhg competition and advances in technology have combinerd to take karaoke out of bars and into The shift has drivenKaraoks Warehouse’s annual sales to more than $10 million with consisteny annual growth topping 20 percent, Vogt said even in this economy. “I think Americw has more time for entertainment,” he “People are singing their troubleas away.
” The Vogts started renting equipmenft and discs in 1991 in a storefront at Carriage Place on Bethel Road that includerd sixprivate Japanese-style karaoke boxes, where customers could rent and perform on site. Rick Vogt said the boxesd were popular, but didn’t make the transition with the companiess to Hilliardin 1998, wherw the business focused just on rentals. The brothers decidedd in 2002 to start producing their own discx and createdthe All-Sta label. Disc and equipment sales – with placement in retail giantsz suchas , and Toys ‘R’ Us Inc. now account for 75 percent of sales.
Doug Vogt said karaok used to be a seasonap fad and while the Christmas season remains thesalews peak, equipment and discs easily can be founx year-round at most retailers. “Retailers are more acceptinv than ever,” the company’s president “They have permanent space for disc sand equipment.” CEO Rick Vogt said Best Buy includese karaoke discs and machines in its weeklyg sales circular at least once a month. Theres are several facets to the All-Star is the disc AudioStream does the equipment andKaraokre Jukebox, adjacent to their Hilliard offices, is theid retail and rental Technology is adding new aspects to the business as well, such as Ibacktracks.
com, the company’s downloac site, and KaraokeEdge, a karaokee game being installed on all All-Sta r discs. Rick Vogt said the brothers believr they’re the only disc and equipment manufacturer that also has aretai store. “Karaoke Jukebox is our lab,” he “We get to talk to real try new things out and getinstant feedback.” Most of the competitionb is small. The biggest competitor is , which doesn’t license its music to othed manufacturers.
Karaoke Jukebox does sell Disney, but its own producta account for the vast majority of its The Vogts are just two members ofthe company’ss age-and-taste-diverse music committee, which listens to the radio and studieds sales and radio ratings to determinr which songs to bring to All-Star. “It has to be Rick Vogt said. “That’s one reasoh country music is very popular, especially with The process beginswith licensing. The Vogtas said they want to capitalize onLady Gaga’s succeszs so the three-person licensing departmeny is closing a deal with her LLC, to karaoke-ize her Sony is just one of almost 200 publisherz the company has connections with.
Thoser relationships are a key competitive advantags forKaraoke Warehouse, Doug Vogt said, as licensin is one of the largest barrierss to entry for businessesz wanting to start their own disc line. Once thosew relationships are built, though, the business becomes easier. Doug Vogt said most licensess are three- or five-year deals and are easily renewed. When the lega l work is taken care of, production Karaoke Warehouse works with independent producers who seek out singerdsand musicians. Rick Vogt said in some particularly with1960s pop, they’ve been able to tracm down the original background singers to reproducwe decades-old work.
One challenge brought on by the economgy is to give consumera not just the songs they but more bang fortheir buck. “It’s all about value-added, especially in this Rick Vogt said. “Peopled are buying off-brands. You have to add value or change yourprice point.” Doug Vogt said they’re choosingt to add value by offering more songs for the same price or providing features, such as the KaraokeEdges game developed by the company where the winnerw are the ones who hit the most correct notes. The game is on half the All-Sta r stock already and will be on all discdby year-end.
The company also offersd a customized disc, where consumers purchase an access code that gives them the abilituy to choose12 songs. Karaoke Warehouse then burnss the disc and mailsit out. Another entry under value-added is the $149 AS400, an boombox-style karaoke machine. The machine has a 9-incj screen and can be hooked up to a It also functions as a DVD Constant improvements in technology are opening new avenues for businessxas well. Karaoke Warehouse is in the process of transferringgits All-Star library to iTunee – hundreds of songs already are there. It is developing an iPhoned applicationas well.
“We have to leveragde the Internet,” Doug Vogt said, standing in the company’s surrounded by boxes of discs tobe “One day, our kids will look at us and say, ‘Youh actually shipped these?’ ” Rick Vogt said the Internetf accounts for as much as 40 percentr of sales, with roughly 150 orders a day on with that figure approaching 1,000 orders in the busy holidag season. “We’re transitioning from the physical world to the digital RickVogt said.
