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Release Date 10/27/15 Episode Length 33:01

Michael Amburgey of KaraoQ

Moving the Karaoke Industry into this Century

with Michael Amburgey of KaraoQ

Rocketship: All right Michael. Welcome.

Michael: Hi. How you doing?

Rocketship: Good. Good. First off, tell us a bit about what you’re doing with High Volume and your first product, KaraoQ.

Michael: Sure. High Volume Media Company was started in I guess it would have been July of last year. Really, the overarching goal of the company was to use technology in order to innovate and disrupt things within entertainment. Whether that be in the case of KaraoQ the Karaoke industry. Speaking to that, KaraoQ is basically an app in a platform that allows automation, personalization, and on-demand experiences within any venue that hosts nights of Karaoke. The main goal there is the ability to create some transparency and much like what an Uber or a Spotify or a Pandora does. You have on-demand and you have personalization. What I really mean with that is today in the karaoke industry when you go to a bar that has karaoke or some venue that hosts a night of karaoke, you typically, as a patron, may experience different processes in order to sign up for a song but typically you’ll go to a printed song book. It’s old, nasty, it’s outdated, it’s printed. You flip through it, you find a song that you want to do, scratch it down on a piece of paper, walk it up to the DJ of a KJ. They may say, “It’s too slow, it’s already been done, it’s already in the Que.” It’s really cyclical for the patron or the performer. Once you do get your song in, you wait. There’s no transparency. You don’t know when you’re coming up to sing. The constant info of the people to the DJ or KJ about how do I sign up for a song or where is the song book or where am I at, what am I singing? All of those can cause a lot of frustration in the manual process that a KJ or DJ has to go and manually account for. Then once you’ve had the chance to get up and sing, it’s the end of the experience in a way. In fact, the people that are waiting because there is no transparency or on-demand experience, they typically leave. Once they leave, the DJ is spending more time calling out the names of people that have already left than actually playing music. The pinpoint that we’ve seen for the venues, the third pinpoint here, is that the people are leaving and so that hurts the vibe in the venue and also ultimately hurts their sales and their revenue. The karaoke product as a whole is aimed at automating all of that with the smartphones, the miniature computers that everyone carries around with them daily. Much like a 4 square you can check into a venue. In fact when you go to check in you can see how many people are at the venue and how many people are actually in the Que without even being at the venue. It gives you some immediacy and some insight. Once you’re there it’s all personalized to your social profile that you’ve logged in with. You get the ability to see who’s in the Que, you get the ability to rate the performer that’s on stage, one to five stars. We digitized the song book. Instead of going with that old nasty printed song book, pull up the app, hit sign up to sing, search for a song title or artist. Once you’ve found the song that you want to do, you just simply hit the sing button. Again, that transparency, the big part of the industry is that right now nobody knows when they’re getting to come up to sing. There’s no way to create the personalization or the on-demand experience. We not only show the Que, what everybody is singing and when their place in line is to sing, we have a feature called the Plus Bump. The Bump basically allows you to move yourself or anyone up the Que to sing sooner. You get to your song, you’re experience in on-demand fashion.

Rocketship: I have to ask. App aside, why was this something that you were so passionate about? Are you a karaoke singer?

Michael: Hell yes. I love karaoke. I love to entertain. Actually my family has a really big background in entertainment and the music industry. My great aunts were part of the first all female bluegrass band. Martha Carson, she went on to become the first female of country and bluegrass. Some impactful pioneers in where they came from the music industry. My grandfather was married to Tammy Wynette. He wrote songs for George Jones, Charlie Pride, lots of different people. I think all that to say there’s always been the entertainer blood flowing through me and I think why I identify this as a problem, obviously I had to cater to this manual experience by doing it myself as a patron or as a performer. I also have a close friend who happens to DJ full time and has done this for the past 20 years at a bar here in Nashville. He’s constantly talking about the disruption and the distractions and all of the manual process. The bar owner was talking to me like, “Hey you know there’s… When it starts to get to a certain hour it’s just a cluster. We’re having to try to tell people how to go sign up for songs, they’re trying to do drinks, their people are leaving. There’s got to be a better way.” We all have these miniature computers in our pockets. How can we leverage what we already have today in a very digital and a very mobile age and find that as a way in order for us to improve not just the actual experience but upgrade it and ultimately solve a problem as part of that.

Rocketship: How big is this industry?

Michael: Karaoke, its always … Everybody calls it a niche market but it’s $15 billion globally. It’s a massive market. We always like to say that it’s gotten there on stone wills.

Rocketship: Where are you making your money? Are you charging the DJ? Are you charging the patrons? Where does you’re cut come from?

Michael: We have 2 iterations of our product. I’ll speak first about the initial version we have today which is just simply the karaoke app and platform. We don’t charge for the app so we create no barrier of entry for the patron or the performer. Likewise for the actual platform which is called KJ Connect and Venue Connect which is inside of the karaoke product. We don’t charge them up front directly either. There’s no premium or premium subscription or licensing models. What we do is we make money as they make money. When we talked about those plus bumps that moves up the Que, we basically take 25% of those transactions. Part of that goes to processing fee for a merchant account then the rest of that’s considered revenue. Why we do that is because right now that’s either A, an unrealized revenue stream, B, it doesn’t exist, or C, the industry, the DJ industry and karaoke industry as a whole rely on cash tips. Obviously the dichotomy, the change in shift from cash to debit card, credit card, Paypal, Google wallet, Apple Pay. We’re accounting for all those within our app so that no cash is no more problem. Through that convenience we just simply charge a fee out of that that we make money as they make money. Speaker 3: I can see getting a bar setup on this would be the easier side of it. You have people that really want it, they can train their staff and do it but what happens when customers come in and say there’s 300 people in the bar that night. How do you get them all to use the app? Is it required in order to sing?

Michael: That’s a great question. We’ve actually experienced this first hand. It’s a couple of different scenarios. One is user information. How do you get them on board and how do you explain to them the value of it and get them to understand, “Oh okay, this is something that I want do, the educational side.” Then second from that is the value proposition. Not only retain the user, but to be able to help that implementation and onboarding at that venue. What we do there, we do several things. One is we incentivize the patron or the performer in that as they get the application they can actually unlock credits to do things like bumps for being a highly rated performer or recommending or referring a friend to go down with the app. Even patroning the venue multiple times throughout a month. I think of it as loyalty incentive. The actual consumer education side of it, we actually have video and audio spots that the karaoke jockey or disc jockey, the DJ, can play in the venue cross their video screens and their PA system. Think of it as like anywhere from 15 second stingers to a minute long conversational clips that almost feel like an ad you would hear on the radio of 2 people talking back and forth and the guy’s learning about karaoke. If you actually, on our web site, karaoke.com/promote, we have some of those audio and video clips up there. As you listen to them you’re like, “Oh okay, now I get it. They’re all playful but they’re really geared towards consumer education. Then the additional way is through a product we’ve created called Venue Que. Venue Que is basically an add on to the karaoke platform for venues that they can then go Chromecast or Broadcast. The actual Que itself, on television screens live in their venue. If you think of it very simply as the karaoke logo in the middle, Appstore and Google play logos on left and right, it says, “Getting the Que download for free and it shows the actual Que so you’re social profile. We’ve got your picture, your first name, the song that you’re singing, the artist, your rating if you want to display it. All of those are helping drive user acquisition as we’ve seen anywhere from 5 to 7 times more than when it’s not used. Then likewise you talked about not having the application on your phone. There’s the incentivize part to go get the app but if you don’t we’re actually getting ready to launch Qiosk which is Qiosk with a Q. That’s a tablet based addition of the app that if someone has an older style phone, their phone is dead, they can simply walk up to the Qiosk, put in their name, select their song, hit sing and it will go into the Que and then the ability to still see the Que in real time on that tablet Qiosk based format. Speaker 3: It sounds like you had a local bar to get set up with and work through some of the initial bumps in the road. What have been the biggest challenges in trying to grow this even outside of Nashville and across the country?

Michael: Sure. Scaleability’s always something that you have to focus on. I think the biggest thing that we face is user acquisition. Doing the things that I’ve just talked about, sending the venue’s now a welcome kit that have what we like to call a mock songbook. It’s a black binder that would be not dissimilar to what you’d see in a karaoke bar for a songbook. It has a big orange Q and the word songbook in white letters. When you open it, it’s like, “Oh snap, we’ve gone digital. Go down with the app.” Things like that. The user acquisition part is big but when you talk about … Speaker 3: You guys are just sending that out to bars across the country?

Michael: That’s correct. The ones that sign up through our platform, we send them out a welcome kit. It also has a couple of coasters that have QR code and tiny URLs and are very graphical in nature, or like double sided. They have the ability to then say, “I want more of those marketing products.” We direct them back to our website where they can purchase additional signs, banners, the Qiosk if they want to. Different things of that nature to help them increase the throughput and user acquisition. To your core point too, it’s scalability so we’ve utilized technologies like Zapier that it’s like a ETL, an API type tool. To help automate some of our process and flow, we’re using chat clients that are integrated with Zendesk. Several things that we’re using to focus on on-boarding and automation so that the ability for a KJ or a venue … They’re really 2 separate customers. A full time karaoke bar is one clientele and then what we call a mobile DJ or KJ, they will host multiple nights of karaoke at multiple venues in the given week. The average is usually 3 venues in 3 night of karaoke. They’re really 2 different subsets of needs but as we create the value for the KJ or DJ, he then on-boards the venue on the back end. In speaking to that, we’ve actually seen where these venues have come on and said, “We want more nights of karaoke.” We actually have some up in Ohio that want to change and shift their entire approach of their bar to be a karaoke bar focused on the karaoke experience. Then likewise we’ve seen venues even here in Nashville, San Antonio, and other places that don’t have karaoke today, that have understood the value of what we’re bringing from a venue and patron perspective that are actually wanting to now host karaoke nights. We’re able to then basically go filter that back to our network of DJs and KJs and help them grow their business as well.

Rocketship: It sounds like one way that bar scene get started if they actually seek you out or if customers tell them about you guys. Are you also doing any kind of outreach to bars in the form of outbound sales?

Michael: We are. I’ll say this, we started focusing on an email blast campaign. We’ve done some Facebook stuff, we’ve done some direct to chain restaurants. A good example is Hamburger Mary’s. It has come on and now wants to use our platform and they’ve got locations in Atlanta, LA, Denver, Chicago. I think even like Sweden. Those have been a focal point but we’ve actually been leveraging a strategic advising company here in Nashville called Back Porch Group. They’ve been super instrumental in understanding what we’re bringing to the table and helping us for scalability. Helping us for our user and customer acquisition and part of that has been taking these opportunities to grow gradually and learn from that and be able to adapt quickly. The reason for that is next week, October 22nd we’re having what’s called the Karaoke Summit 15. The entire platform for Karaoke Summit 15 is to show our new products roll out called KaraoQ 360. What that simply means is that we have our app and our platform embedded in the middle. We’re also bringing to the table fully legal, fully licensed, high definition karaoke content. Then on the back end of that we actually have the integrated software to go back and play back that for DJ software with a company called PCDJ. When we take Karaoke Cloud Pro which is the content, KaraoQ, the app and engagement platform, and then PCDJ KaraoQ [Kai 00:14:46] we’ve created a very holistic 360 approach that has not been done today. When we speak about how we’ve scaled an approach that we’re taking, that all been leading up to making sure that we can quickly and very agile deploy out for Karaoke Summit based off of the KaraoQ 360 deployment.

Rocketship: When we talk about music, one of the big topics is often licensing. Do you guys have to deal with anything on the licensing side of this music?

Michael: Yes and no. The actual KaraoQ platform itself does not have to directly. By way of the partnership that we’ve created with Digitracks with our Karaoke Cloud Pro System, they already have an existing licensing and royalty payout system that they already handle directly with publishers. We’ve become a part of that and really what that simply becomes for the KaraoQ 360 product is that you then basically get approval from the publishers that that can become an embedded part of their process. Likewise, we’re actually focusing on the publisher payouts for royalties to ensure that we’re creating value back to the industry in what we do and doing that in a very transparent way. Much like if you have Billboard charts, we’re creating karaoke charts so that you’ll be able to understand the top artist and top song being performed across the United States. If in fact the actual app, the songbook that the DJ has, has songs that are not cleared for publishing for karaoke, we’re still reporting those and the royalties are still being handled accordingly but that gives us the ability to then help show unrealized revenue back to the music industry and hopefully that’ll be something that then if they get the licensed tracks to us, then they’re continually monetizing that, not losing that revenue. That’s what we aim to do.

Rocketship: You recently went through the Music Project in Nashville right?

Michael: Project Music? Yeah.

Rocketship: Project Music. Sorry. Tell me a bit about … What was that experience like for you? What did that do for you guys as a company?

Michael: Project Music started January of 2015, wrapped up April 24th, 2015. It was a grilling boot camp if you will. The first week actually was called boot camp and it felt like 30 hour days even though there’s not 30 hours in a day. It was very important to us so I think some of the biggest things that I can say is it helps you refine and drive back to creating processes around what you do. When I’m talking about that I’m talking about … When I talk about advised entrepreneurs it’s driving back the voice of the customer, voice of the business, surveying, getting out of the building, going and asking questions and verifying or disproving your assumptions. All those are critical for your business model. I think Project Music really, really helped us to do that which is really the overall format of the National Entrepreneur Center. More specifically for Project Music, it was getting us in front of decision makers and gate keepers in the music industry that are now seeking and wanting to be a part of some disruptions, some innovation. Maybe in some cases, not because they want to but because it’s becoming a necessity for the music industry based off of changes and in-streaming services like Spotify and the decrease in terrestrial radio and physical album sales. It’s been a very big value for us to be able to start creating those relationships and being able to fast track meeting with EVPs and Universal Music and Warner. We have 2 executive vice-presidents from Universal Music that sit on our advisory board. Some other heavy players so I think that that’s been super crucial for us on the relationship side of it. Then overall just like the community and the family aspect. I’ve talked about this in several other interviews and other companies have … All the companies that came out of Project Music and the people that were involved from logistic side, program director, [inaudible 00:19:00] they bonded together and helped push each other over the finish line. We all became emotionally invested in everybody else’s company that we want to see everyone succeed from this first cohort, this first accelerator. Then be able to help pave that way for a future accelerator so that we can look back at Project Music 2020 and say, “Wow, we took a lot of arrows and look where they’re at now.” If all of that can create better companies and more value for the music industry and for Nashville and Tennessee as a whole then I think we’ve done our job.

Rocketship: What’s the next step? What stage are you guys in at KaraoQ?

Michael: Sure. The next big thing that we have coming again is October 22nd. It’s a Karaoke Summit and that’s really unveiling this KaraoQ 360 platform. That’s the ability to take the licensed content, our platform in the middle and then the actual playback software and create the end to end experience. As we start to ramp up from that, not to give a whole lot of detail but it’s going to be things like having an actual artist as part of that venue Que, that video display. Actual artists come on the screen and say, “Hey I want you to sing my song, X.” Then be able to enact on that directly within the mobile app. Then likewise with … If you take someone like Kenny Chesney. If his songs are super hot during karaoke and there’s a lot of people singing them, he could actually give an engagement or a call to action. “Hey this is Kenny Chesney. I want you to sing my song, X or Y. Then if you do that, I’ll give you a … You’ll get a shot of Blue Chair Bay Rum at the bar or whatever.” It can create a very distinct synergy between the artist and drink brands because we are in front of a captive market or a captive audience that is unlike a lot of other ones. Meaning that they are engaging in music by physically performing it which I think imitation is the sincerest form of flattery. I think that them giving up and doing those songs and exposing themselves in such a way in front of friends, family, and strangers alike. I think that that shows that they are most likely an avid consumer of music. Typically they’re doing that in a bar setting. The ability to create those synergies with major liquor brands, drink brands, artist, and music labels are the kind of things that are starting to get deployed as we look beyond Karaoke Summit 15. Then going into next year, we’re going to be focusing on KaraoQ version 2. Which is really kind of a massive face lift but we’re integrating specific things like getting a ride with Uber. As much as we talk about the ability to go to these bars and do these songs and get drink specials, we want to do that in a responsible way. If you can imagine as you’re leaving the bar, the venue, KaraoQ as it sees you checking out, says, “Hey it looks like you’ve had fun, had a few drinks, let’s get you home safe with Uber.” You can directly enact on getting an Uber ride directly from the KaraoQ app back to wherever you’re going. I think that that tells a good responsible story for us, for the venue and for the drink brands. As we focus on that and really focus on how do we create the best social experience or what we like to call a social music experience with high volume media is being able to understand what is going on in the venue, the vibe. When we talk about demographics, meeting age range, most popular genres of music. That was the types of things we’re going to now begin to expose through the apps so the people can see what is happening in the venue before they even get there. Then be able to have a very social, very personalized, very on-demand experience. We’re going to be launching that at Nightclub and Bar, and also MobileBeat. Both of which are in Las Vegas Trade Shows in March.

Rocketship: You’re just saying that before I go to a bar, I could actually see most of the bar crowd is 24 to 30 and they’re listening to Country music?

Michael: Absolutely correct. That actually came from again surveying where we would have people telling us that they would call karaoke bars if they’re out of town and saying, “Hey what’s the type of … What’s the scene look like there? What type of music are you guys playing?” If you even look at what Google’s doing today, Google’s focusing on crowd sourcing data for restaurants to know how long the wait is. If you look at Waze. You know the ability to know what’s going on on the highways and interstates and with wrecks. All of this thing is being sourced because it’s a value to the people who are engaging in that content so us being able to help correlate the vibe of the venue without necessarily being there and the ability to get completely transparent and jump into the venue and see what the Que looks like before you get there. There’s obviously a natural almost like a tender type of span where you can see how many guys and girls and age range and if that’s your type of venue that you want to go out to. If you like certain singers they prefer a certain demographic and a certain genre of music. Being able to give people that transparency and insight before they even get to the venue is going to be a big spin for us. Then simply knowing where your friends are at and what they’re doing around you through the app and being able to capture those moments directly through the app to create much like a social feed for KaraoQ-Q of what’s going on across all these venues.

Rocketship: Interesting. How do we keep up with you and KaraoQ-Q online?

Michael: Absolutely. You can go out to KaraoQ.com. K-A-R-A-O-Q.com. When you get to the main page you can actually just scroll down and you’ll see a sign up for our newsletter. We typically put a lot of stuff out there. We also have a news and press section that you can subscribe to and those both exist on KaraoQ and High Volumes website which is H-I-V-O-L-U-.-M-E, a little play on words there. They’ll both be available and in fact we’ve got some press releases coming out for Entrepreneur Magazine and an article that’s getting published on us there as well. We constantly try to stay out in front in the news and the media and letting people be aware of what we’re doing.

Rocketship: Awesome. What is your karaoke song?

Michael: I’ve changed it. I used to always say, “You Give Love a Bad Name by Bon Jovi” but then I found out that that wasn’t legally licensed so I should probably say, “Lose Yourself by Eminem.” In fact we did Oktoberfest here in Nashville which is a huge draw, 100,000 people. It’s one of the biggest Oktoberfest festivals in the southeast. We actually have an entire stage. It’s up on our Facebook page. We got video. It had 5, 6, 700 people packed in, 2 blocks deep. We’re all doing these songs to the point that the metro police were like, “All right we’ve got to shut it down. It’s getting late. There’s a ton of people still here.” The last song I did was Lose Yourself by Eminem. It was a fun time. If you go look at the videos there’s this girl that was doing Halo by Beyonce and her friend got up on stage and took her shoes off and started doing the whole ballet dance and you’re just watching the crowd and they’re all doing the Whip and the Nae Nae and stuff. It’s like truly what we call a social music experience. Everybody’s out there having fun and engaging and connecting. We always like to say, “It’s creating moments and memories and relationships in the social music experience.” That’s what we love about what we get to do is we get to work hard but we get to play hard too.

Rocketship: Yeah. That’s pretty amazing. Thank you so much for coming on.

Michael: Hey absolutely. I really enjoy talking to you all.

Transcription provided by Jotengine

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