Say What? MTV Sings Duet With Karaoke Maker

Cable World, July 2, 2001 by Christopher Schultz

Network hopes craze continues with Britney generation

Last week on MTV's 2001 Casting Special--which documented the selection of the stars of the 10th anniversary season of the network's reality show The Real World--Lori from New Jersey announced to the group that singing was just about her only talent. A couple of people asked what she could sing; a few moments later, there was Lori, mike in hand, belting out "Respect," with the lyrics to the Aretha Franklin hit scrolling down the TV screen beside her.

She's not the only one singing along these days. MTV--that perennial arbiter of all things youthful--is lending its potent brand name to a Florida-based maker of karaoke machines, the contraptions that allow users to sing along to favorite songs backed by the instrumental accompaniment of the original track. Coconut Creek-based The Singing Machine Company Inc. last week unveiled plans to market a line of MTV-branded karaoke machines designed for the TRL crowd.

Karaoke--which first became a craze back in the '80s--might not seem au courant enough for the ever-hip cable network. But as it happens, MTV already airs a popular sing-along show--Say What? Karaoke--and sees the new marketing ploy as a chance to keep its brand before young buyers who are just discovering the devices--and the tunes that made them popular in the first place.

Karaoke is still big. The ratings for Say What? Karaoke have slipped a bit in the past year, according to Nielsen Media Research, although the program still ranks among MTV's top 30 shows most weeks and during the week of June 5th was the third-highest rated program on the network among teens.

Claudine Murphy, EVP of Hollywood-based youth-marketing firm Look-Look, says that karaoke is popular everywhere. Hipster clubs like Zen in the Silverlake neighborhood of Los Angeles (home of rockers Beck and the Beastie Boys) and Elbow Room in New York sponsor karaoke nights, regularly attended by celebrities like Liv Tyler, Chloe Sevigny, Patricia Arquette and Michael Stipe.

Kids who do karaoke are "just making fools of themselves and having fun," Murphy says. "I don't think it'll go away quickly."

The numbers support that view. The Singing Machine--which bills itself as the only publicly traded pure-play karaoke maker--made $700,000 in net income last year, off sales of $19 million--a sales increase of 99% from the previous year.

Heidi Eskenazi, MTV's VP of licensing and merchandising, says that the new machines, made with the input of MTV's creative staff, feature colors and designs that appeal to the network's core audience of teenagers. Two MTV-branded karaoke machines will become available at the end of this month: a lower-end model that starts at around $80 and what the company calls "the world's first karaoke machine to incorporate a fully functional television into the unit," the $199 SMGK-1000.

John Klecha, president and COO of The Singing Machine, recalls that executives at his company began noticing a shift in the karaoke market last year. "We discovered that the music people were buying to play in their machines was tailored to MTV's audience. Adults were buying machines and kids were playing with them." Klecha realized that the most popular artists--Britney Spears, Blink-182, TLC and 'Nsync--were already MTV staples. So last November he approached the network about a deal.

By January, The Singing Machine had the license it needed for the machines. The deal requires royalties of $650,000 to be paid to MTV over three years, according to Klecha. He foresees strong enough sales to meet the obligation in the first year, as his company's 100,000-unit goal already has been drowned by an initial wave of orders topping 200,000. The companies plan to sell the machines in The Singing Machine's traditional outlets: Best Buy, Toys R' Us and Meijer, and via JC Penney, Sears and Fingerhut catalogs. (Toys R' Us, whose initial order included both models of the karaoke machine and the full line of MTV music, has ordered more units than any other vendor, Klecha says.)

MTV music executives also helped devise song lists for the 20 CDs that go in the new branded karaoke machines. The music categories include pop, rock and R&B.