KTV is going through its darkest hour!

How long has it been since you went to KTV?

Why don't young people go to KTV anymore?

The KTV is not working offline?

KTV closure wave is coming?

The KTV industry has been hit hard by the new crown epidemic that has ravaged the world for 2 years, and many companies and businesses have been forced to transform or even go out of business.

True Love Fantasia, Chambers

and many other Chinese KTVs lost money/shuttered down

At the end of 2020, Jay Chou ended the catering and entertainment company that he had been working with for nearly 10 years - the (hereinafter referred to as "True Love Fantasia").

True Love was founded in January 2012 with a registered capital of 50 million RMB, and its business scope included catering services, food sales, KTV, bars and so on. However, judging from the three years after its opening and the current situation, True Love Fantasia is in the red. from 2013 to July 31, 2015, True Love Fantasia's total operating income was RMB 17,483,517,220,000, with a net loss of RMB 616,966,662,000, while the profit and loss attributable to the shareholder, Jay Chou, in 2015 was RMB 93,000,000 yuan.

In October 2020, a copyright infringement dispute case was announced on China's adjudication documents website. True Love Fantasy was sued for unauthorized broadcast of 313 music and television works, including Swallowtail Butterfly, Becoming Whole, When Love is a Thing of the Past, and Waking Up from a Dream.

At the same time, a "Jay Chou invested in KTV accused of nearly 300 songs infringement" incident in the network sparked heated debate.

For the true love of Fantasia KTV, the loss of the aura of heavenly fame, but also in the KTV industry under the severe winter, whether it can peacefully "winter" is still a problem.

The situation on the mainland is not optimistic, and so is the island of "Taiwan".

In January 1995, the mainland's first money cabinet opened in Shanghai Jing'an, two years later, respectively, in Huangpu and Luwan opened a, the Japanese mass-market karaoke model really brought to China. So far, Chambers is slowly moving towards its peak, and KTV has ushered in its heyday.

Starting in 2015, Chambers' first store in Beijing, "Chaowai Chambers," announced its closure, a brand that had dominated the mainland market with 18 stores in 2008, with only the last five remaining in 2015, basically announcing the total collapse of Chambers in the mainland market; in June 2021, Chambers revenue was NT$10.6 million, down from NT$1.6 million in 2009, a year-on-year increase of NT$1.6 billion. NT$10.6 million, a year-on-year decrease of 95.9%.

However the fall of this industry leader does not mean that more market share was ceded, rather, it is just a side effect of the shrinking of the entire KTV industry.

In 2015, the group-buying APP spelled low price to compete for the market, set off the O2O war, low-priced fight, KTV industry into white-hot competition, the brand damage is serious, McLeodi, Hollerdee was weakened, the music, the traditional brands such as DaGeoksing eclipsed the field. 2021 June, Hollerdee revenue of 9.3 million new Taiwan dollars, a year-on-year decrease of 96.2%.

Eyeball data shows that as of March 2021, there were only 64,000 KTV companies left in China, with as many as 40,000 canceled or revoked, which is equivalent to almost 2/3 of the number of existing ones. compared with the peak of 120,000 companies in 2015, this data is a waist cut.

Similarly, Japan, the birthplace of karaoke, is facing an unprecedented crisis.

Japan's 46 karaoke establishments,

Revenue is down 61.3% year-on-year

In 2021, Japanese financial website The Owner published an article titled "The Karaoke Industry's Super Sadness. titled "The super sad state of the karaoke industry", which gives a set of figures from Tokyo's Commerce and Industry Consulting.

In 2021, 46 karaoke parlors across Japan saw a 61.3% year-over-year drop in revenue. The three largest of them, Daiichi Kosho (which has Big Eco and DAM) lost nearly 18.8 billion yen a year, Waigao Kaisha (which has Fortune Cat Karaoke) lost nearly 1.7 billion yen in half a year, and Ironmanization Project (which has Ironman Karaoke) lost nearly 400 million yen in half a year.

In addition, KTVs in Singapore are also in jeopardy due to the epidemic.

20 Family KTVs in Singapore,

Only 8 remain

Family KTVs in Singapore are among the victims. Before the epidemic, there were 20 home-based KTVs in Singapore. 2 years on, only 8 of them have survived. Now, the only remaining 8 are faltering.

SingaporeTong (Public ID: SingaporeTong) interviewed the Singapore Entertainment Alliance Association (SEAA) and a number of local home-based KTV business owners, and came to realize that it has not been easy for them to make it through these past two years.

Home-based KTV operators are having a hard time making the transition

Revenue is not what it used to be

During the outbreak, local nightclubs were unable to open for business, and home-based KTVs suffered as well. Some regular customers suggested the owners try to make the transition, however it wasn't that simple.

Teo Heng director Zhang Yuqin said: "We have considered converting the rooms of our KTVs into food and beverage establishments, but in the end we gave up on the idea. This is because the catering industry itself was greatly affected during the epidemic and we have no experience in opening restaurants. At a time like this, if we still want to enter the catering industry and try to get a piece of the pie from their mouths, I'm afraid it's not that easy."

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Entertainment Alliance Singapore; and Teo Heng director Teo Yoke Chin

Earlier, Teo Heng had converted some of its outlets into places offering study rooms, offices and online classes. Needless to say, it did have some effect and many regular customers came to support it. However, the expenses were still much higher than the income because it was not possible to charge too high a fee. As of this year, the government has allowed 50% of the staff to return to the office and they have had far fewer customers.

Another local home-based KTV operator, Hi-Flip, however, has successfully transformed itself into a food and beverage service outlet. It is reported that six of their seven stores have already been transformed into food and beverage establishments. However, Hi-Flip's marketing manager, Rika Suho, revealed that their revenue is now only about 10 percent of what it was before the outbreak.

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Entertainment Alliance of Singapore; and Hi-Flip's marketing manager, Rija Suh

Suh Rija said: "Right now, the movie theaters are still open even though we have a private movie screening service. There are movie theaters, so why would people come to us? So this is the biggest headache for us at the moment. In fact, after we launched our new concept, we really had to think seriously about whether we could bring customers back."

It is understood that every home-based KTV owner lost a lot of money during the epidemic. And Teo Heng even lost up to more than 10 million dollars!

The investment in front-end decoration is too high

Difficult to say shut down

Since the business has been losing money, why not hurry to close down and stop the loss? In fact, practitioners have their own difficulties. It costs them about S$1 million to renovate each store, and if they decide to close down the business, according to the rules, they will have to rehabilitate the store again and return it to the owner.

Teo Heng director Teo Yoke Chin said, "It costs about $500,000 for one outlet just to tear down the rooms, and since the start of the outbreak, we have closed 10 of our 14 stores, so that's a lot."

The head of Cash Studio, Pan Gang, then pointed out that the amount they had invested up front was just too much, and that if they closed now, it would be a bloodbath!

He said, "We have our reasons why we're sticking around. It's a business that we've built slowly over the years. I, for example, I was making money, I put it back into my business, so that from 9 rooms, expanding to the peak of 190 rooms, that's how it was slowly built." So even if the business owner wants to transform, he or she has to utilize the existing private rooms.

Pan Zang said, "I also want to switch, but I have to think about how to use my room to switch, not that all the demolition to switch. Now it's just a situation of how can I go to the transformation in compliance with the government's requirements."

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Singapore Entertainment Alliance; and Pan Gang, head of Cash Studio

Boxes have to be locked before food and beverage services can be provided

Rent has to be paid for the period of closure

Last year, there was an incident in July when a Singapore nightclub was closed down. In July, there was a large cluster of infections in Singapore's nightclubs, and home-based KTVs were dragged down with them. Chung Sang-hong, secretary of the Singapore Entertainment Alliance, said that in mid-July last year, more than 400 local nightclubs transformed to provide food and beverage services have to suspend operations for two weeks. They can only operate again after the authorities have passed their inspections.

One of the difficulties encountered by home-based KTV operators is that they have to lock all the boxes before they can resume catering services and open for business again. In this regard, Cao Jing, director of K.STAR, said, "K.STAR actually has very little room to adjust in terms of design and decoration, because our entire place, 90% of which is boxes, 10% of which is corridors and back kitchens, there is simply no other place."

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Entertainment Alliance of Singapore; and Cao Jing, director of K.STAR

The director of the family-style KTV, Major 99, Tan Ai Fung, also said, "Last year, the authorities allowed us to do food and beverage for the time being, and we've been open for just three months, and then told to shut down again. We have tried to do as much as possible, just sell wine, snacks, have learned to do a lot of things, lo mein rice have done very famous, but then the authorities told us to shut down, we can only do as we do."

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Entertainment Alliance of Singapore; and Tan Ai Fong, director of Major 99

Practitioners said they could not do business in the process of applying for the transformation, yet they were required to pay the full amount of rent.

Cao Jing, director of K.STAR, said, "Our rent is more than $50,000 a month, and if we can't get the government's review and approval in the first place, we won't be able to do business, so the pressure is really high."

Pei Chunqing, the founder of Sing My Song Family Karaoke, also said, "Customers are hoping that we can stick around and come back to support the karaoke once it reopens. I was touched by this and wanted to stick with it, but there is still rent to pay and the government has not mentioned when it will reopen, so there is no way we can be a fool and keep paying that full rent. I had asked the building management if I could pay less rent, but they said no."

Pei Chunqing, 49, has been in the business of KTV jukebox software equipment since he was young.In 2019, he tried to open a store for home-based KTVs, and the epidemic came. The business didn't work out, and he worked many temporary jobs and even took a course for swab testers, but never had a job offer.

From left: Yao Dong, executive director of MasterCard; Chung Sang Hong, secretary of the Singapore Entertainment Alliance; and Pei Chun Ching, founder of Sing My Song Family Karaoke

Only eight of the 20 family KTVs remain

The owners want to talk to the authorities strong>

There is actually a big difference between home-based KTVs and nightclubs, dance clubs and discos. While the former simply provides a place for people to sing, usually with about 5-6 people per box, the latter involves a large group of people drinking and dancing together in a tightly packed space. And practitioners like Teo Heng have stuck to their guns for more than 30 years without selling alcohol!

Earlier, Teo Heng joined with eight other home-based karaoke operators to launch an online petition, asking the authorities to distinguish home-based KTVs from nightclubs, dance clubs and other entertainment venues. In response, the authorities said they understood the situation faced by home-based karaoke operators and that the Ministry of Home Affairs was exploring their request, but there was still no definite answer.

The interviewed operators said that since Singapore has decided to live with the virus***, and most other local businesses have already resumed operations, they hope that the authorities will reassess and allow home-based KTVs to resume operations as soon as possible. If the authorities are concerned about people "fishing in troubled waters", then they can ask a neutral organization like the Singapore Entertainment Alliance to monitor the situation, and once they find something wrong, they can immediately reflect it to the authorities.

Teo Heng director Zhang Yuqin said: "We don't know how much longer we can hold out, but if we continue like this, Singapore's home-based KTVs may have to disappear. We are pleading with the authorities, is it possible to help us as a group by setting up a special department to discuss matters related to the reopening with us? We can definitely cooperate with you."

Zhang Yuqin suggested that the authorities could consider organizing a pilot program where they, the owners of these home-based KTVs, could serve as a role model. If the epidemic suddenly rebounded after they reopened, they would willingly close their stores from then on, never complaining!

Online pan-entertainment

The epidemic is certainly not the only reason why the KTV industry has fallen out of favor. High rents and the cost of music rights have made the already difficult KTV even more difficult.

Opening a KTV is an asset-heavy project. In terms of the location of the KTV, generally choose the core business district, like Windsor, Phantom KTV such large chain KTV, often two or three layers, thousands of square meters.

Phantom KTV investor Wu Hai in the "Hey, I'm just a small and medium-sized enterprises," also talked about the Phantom KTV 2020 monthly expenditure on rent costs have accounted for 33% of operating costs, while four years ago, this figure is still 25%. In addition to rent, there are equipment, decoration, labor, utilities, which are all necessary and heavy expenses.

In October 2018, the China Audiovisual Copyright Collective Management Association issued a "Notice on Stopping the Use of Some Songs Involved in the Complaint" on its official website, which required VOD (video-on-demand) vendors and KTV operators to remove more than 6,600 classic KTV tracks before October 31, and the copyright issue has invariably increased the cost of KTV expenses.

In 2020 and 2021, the China Association for Collective Management of Audiovisual Copyrights (CACM), together with relevant industry organizations, introduced measures to reduce and waive copyright royalties for the karaoke industry, providing relief for the song-and-dance entertainment industry, but it could not dissipate much of the chill that had gripped the KTV industry.

Epidemics, rents, and music copyrights ...... have made KTVs difficult, and new and diverse forms of entertainment have intercepted young people, undoubtedly a drain on the KTV industry.

In 2012, the popularity of smart phones, in 2013, NetEase Cloud launched a "song list" based on the music APP, in 2014, the singing bar class online K song APP took off, in 2015, represented by the glory of the king of the hand swept the country.... ...With economic development and social changes, Chinese young people's entertainment has become more diversified.

For those who love to sing, there are online K-singing platforms such as Nationwide K-song, Singing Bar, Singing Duck, etc.; for those who don't love to sing, there are secret rooms, party halls, table games, gyms, and a variety of net red restaurants.

Technology is advancing rapidly, and the times are moving forward. It is regrettable, but inevitable, that entertainment that emerged in a particular era and constituted the youthful memories of a generation is gradually falling out of favor.