Sound Choice lawsuits hit the Northwest
By Kurt Slep, Sound Choice President
As anticipated, the long-awaited (promised) lawsuits have come to the Seattle area with this month’s filing by Sound Choice® of a Trademark infringement lawsuit against 30 local venues and Karaoke Hosts.
The piracy and unfair competition problem of karaoke system operators running shows with illegally copied karaoke tracks was covered in several articles last summer. Sound Choice advertised special discounts for their GEM Series, but curiously there was virtually no response.
Sound Choice also executed a direct mailing in conjunction with the Karaoke & Entertainment Guide to well over 800 northwest venues explaining the problem and warning them of their vicarious liability for hiring pirate hosts. The opportunity to sign up for their FREE Safe Harbor program (www.SCSafeHarbor.com), was offered to keep them out of lawsuits.
Kurt Slep, President of Sound Choice, made a well-publicized visit to the area in February 2011 to work with local hosts in an effort to promote the Get Legit or Quit campaign of the major karaoke producers. Still, only five hosts took advantage of the opportunity to meet and learn more!
Unfortunately, it appears that conducting investigations and filing lawsuits is necessary to get local pirates and the venues that benefit from their services, out of their obstinate, infringing mode.
After Kurt’s disappointing visit in February, he decided to continue the investigations that were begun in October 2010 and approximately 200 hosts and venues from Vancouver, WA to Everett, and east to Spokane have now been investigated. The first round of filings occurred this month. While fines for willful trademark infringement can be as high as $2 million per mark (Sound Choice has two marks), Sound Choice is initially offering $7,000 per system for a KJ and $10,000 for a venue owning their own system. Settlement costs INCREASE from there, depending on the amount of time to settle and the attitude and cooperation of the defendant. For those who do not respond and default on the suit, Sound Choice is seeking a default judgment of a minimum of $25,000 per system. As part of a settlement, Sound Choice will provide 4,800 of its most popular songs in MP3G format so the defendant possesses a legal Sound Choice library to continue their operations post-settlement. Since the average cost of about $1.46 per song is roughly the cost to legally acquire that many songs over time, it’s an extremely fair settlement, especially when compared to the highly publicized RIAA infringement cases where juries have awarded upwards of $80,000 per song!
Sound Choice’s intent is not to take punitive action, simply to recoup these losses from stolen company property and create a more level playing field for its professional customers – those legitimate KJs who purchase their music from legal sources.
For those not already mentioned in the first round of lawsuit filings, Sound Choice is prepared to generously offer the rest of the local hosts and venues one final opportunity to do the right thing and pay for their content prior to being named in an upcoming suit. Those who come forth voluntarily, will be able to license the entire GEM Series of 6,000 songs for $4,480 (less than $0.75 per song) until July 31, 2011. Thereafter, the cost is anticipated to increase to $5,000. Some financing may be available upon approved credit, or pay in full via cash or credit card and receive a cash discount.
Sound Choice is also offering a “trade-up” opportunity for those who have a partial disc collection. For each Sound Choice disc traded in that is of playing quality, we will give KJs a $0.30 per song “credit” toward the license of GEM Series discs. To obtain this credit, the KJ must License the Diamond Set (3,000 songs) or a MINIMUM of 3 times as many songs as they are turning in, whichever is greater.
A local Sound Choice representative can be reached at (253) 200-5226 to help you take advantage of avoiding a lawsuit, and licensing the GEM Series prior to July 31, 2011.
For those not taking advantage of this pre-filing “amnesty” period, any thoughts of avoiding a lawsuit by quitting Sound Choice versions, or trying to pass an audit by sharing discs, deleting files, or trying to buy up discs is a waste of time and will be considered spoliation and confirmation of your willful infringement. With 200 investigations already done, there is a good chance that it’s too late for many of you to dodge your reckoning day, so you will be well advised to take advantage of Sound Choice’s incredibly lenient offer. Since investigators for Sound Choice discovered a growing level of Sunfly Karaoke, Zoom Entertainment and Mr. Entertainer songs being played, they are in discussions with these UK companies to represent their Intellectual Property interests in the U.S., with possible lawsuits for these brands in the future.
Those hosts who are completely legitimate (i.e., have always had all their legally purchased original discs and have followed the 1:1 media shifting policy put forth by Sound Choice, Chartbuster and Stellar Records), should no longer have to suffer in silence from the unfair competition from those pirate hosts around you. We recommend that you get certified as being legitimate via the voluntary audit and certification programs offered by Sound Choice and Chartbuster and set yourself apart.
As is gradually happening in other areas where Sound Choice has begun to implement its Asset Recovery Program, venues, wishing to avoid lawsuits are requiring that hosts demonstrate that their libraries are in compliance with Karaoke producers’ requirements. That means more jobs at fair wages for legitimate hosts.
I work as a legal karaoke host in the Greater Seattle Area and know EVERY karaoke spot. There are SEVERAL in my area that are outright illegally running shows and just not advertising. If you are interested i will provide you will an accurate list.
RoboKitty
I missed the point. You mean that SOUNDCHOICE is a company which created all these Karaoke files and now is seeking to hunt down and sue any and every K DJ or establishment which may be using illegally obtained files? Please, I would love more information.
RoboKity / Nikki – sure we would like to have an accurate list, although we have a number of investigators in the area. It’s not fair for you or your venues to have your income forced down and your venues to have singers siphoned off by illegal hosts and the venues that support them. You can fill out the “report Piracy” forms on our Sound Choice website or you can email me directly at kurts@soundchoice.com . You should also contact our office and get audited and certified as being legal. We would gladly refer new business opportunities to you (and other legitimate hosts) in the area. Since the next phase of the process is to sue venues for vicarious liability if they continue to employ pirate hosts whom we have sued and who have not settled, we typically will have venues fire their hosts and then search for legitimate ones, so it’s great when we can provide those referrals.
I don’t know if you will be monitoring this site, but if I don’t hear from you in a few days, I will try to contact you at one of your venues.
JOHN GOLD:
You obviously are misunderstanding the situation. KJs and or Venues are being sued for having and using illegally obtained digital files to produce karaoke shows. The files are not ones that we produced but are illegally copied files since the user never owned or purchased or do not currently own original CDG products. Please visit our website FAQs and SafeHarbor sites for all the information you could want or need in order to be fully informed. http://www.soundchoicestore.com/questions-regarding-copying-format-amp-media-shifting-and-com-karaoke-pg-23.html http://www.scsafeharbor.com/
Best regards,
Kurt Slep President, Sound Choice
HELPING LEGITIMATE KJS KEEP THEIR JOBS
Dear Kurt,
As a karaoke junkie and former host myself, I have seen this becoming a bigger and bigger issue for companies like yours. And as much as I feel for you – I think you need to figure out another way to gain profit back. Your “witch hunt” could actually cost you your job and your company. I already know of at least one instance that you have a accused a legally operating business of not being legal. Kurt, my friend, THAT IS SLANDER – plain and simple.
If several of these companies were to get together and file a class action lawsuit for slander and defamation of character, Sound Choice could be placed in a position of having to file for bankruptcy protection and may not survive. Is this what you really want? Well you may just be headed in that direction… In fact, you may want to take note of the rest of the music industry for alternative ways to keep afloat…as you may be in the process of dropping a short anchor in deep water.
I have, and will continue to support Sound Choice and other companies by buying discs and other legal media produced by them. I will also continue to support shows that are “legal”. I really would hate to see your company go by the wayside in any case, but especially because the President let his hot head ruin a perfectly good company!
Sincerely,
KuznKev
As a newbie to all this, it seems to me a lot of this is a business model problem, with technology making an existing business model obsolete. I am generally aware of ASCAP licensing, where the business establishment pays a set fee for performance of music/copyrighted works.
It just seems unworkable for your typical financially struggling karaoke host to come up with several thousand dollars upfront for a song library. I do understand the position of the karaoke companies like Sound Choice–they are not the bad guys in this, just trying to arrange things to get paid for their work, work that others profit from. I agree a big part of the issue is piracy consciousness. But all this can easily start looking like a heavy-handed RIAA-style enforcement.
Are there other licensing models available for karaoke, or is part of the problem, that the music industry companies have business practices that basically throttle the karaoke companies like SoundChoice, and prevent an ASCAP-like license for karaoke works?
Of course, my simplistic assumption is that any business that wants to offer karaoke ought to be able to offer it, legally, with reasonable minimum of hoops to jump through, in the interest of growing the overall karaoke market. I don’t pretend to know the business agendas in play here, so I don’t know how widely that view would be shared.
What other karaoke licensing business/revenue models, besides the per-song, could be viable?
My business partner and I are always buying music, sometimes up to $1000 worth a month. We actually take pride in it but , because we have such a big collection we are constantly accused of piracy which drives us crazy.
I was very happy to meet you Kurt back when you were in town. We talked about me helping you out with Auditing hosts and I am still interested. There are hosts i know and am friends with who I am constantly preaching to about becoming legal and helping them out, but usually they don’t listen or want my advice.
We are constantly struggling to even burn our new music cause we have so much and we actually had to hire an assistant to help reburn our collection, due to some disks being scracthed and us buying or switching them out with new ones.
Sing Responsibly!
Lets shut this guy down…. http://kjbill.com/bill/harddrive.html
“I missed the point. You mean that SOUNDCHOICE is a company which created all these Karaoke files and now is seeking to hunt down and sue any and every K DJ or establishment which may be using illegally obtained files? Please, I would love more information.”
No Jonn, SoundChoice is not hunting down any and every KJ or establisjment using illegal files, rather they are hunting down and suing every karaoke host and establishment PERIOD, legit or not. They then strongarm their (now former) customers into submitting to an expensive audit to prove their innocence. This is called extortion.
Edward I agree. SC is sueing everyone that can’t bully into an audit. Then dragged them into court. Soundchoice will not recover all the hosts ( Legal they lost for doing it this way) . Rather than spending Money Getting pirates and sending Paid Private licensed investigators they Make huge threats scaring Legal And oh I’m sure the Illegal hacks out there. I wish I could support them But I wont with the tactic they have showed. I have also been told why dont you just get a gem series . Why so I can pay for my music AGAIN? Lol People support CB and pop hits. They way they are doing it is Better than SC. They have drives and MP3+g files for sale. You know for usre they are encrypted. Soundscoice had its head in the sand too long and went to a Bullying route. Then final insult, Bail out the pirates with financing. UNREAL. Oh Bye soundchoice either way you lost me. I will use the Music I bought and Only purchase from proactive manufacturers actually hunting real pirates and marking Files so they can be tracked.
@A legal KJ – None of the karaoke manufacturers “encrypt” their music. I think you may be confusing that with “digital watermarking”. Chartnusters does watermark their digital purchases. I do not believe that PHM does because I have an auto-ship subscription with them and the discs they send to me are identical to the discs I have acquired on eBay.
Watermarking is one way to at least know if music sold to one person gets ditributed at a later date, but that only accounts for the sale to the first party. Once someone sells their discs off to someone else, it becomes very difficult to track and account for who may have uploaded a track.
If there were a foolproof method of tracking all of this, the Movie, Music, and Software industries would have implemented it long ago.
One solution may be to use a subscription based streaming service. Chartbuster has such a service but it has not seen wide adoption.
-Chris