Karaoke company calls the tune in digital era
Singing Machine reversed fortunes by pushing … fun
MIAMI — For a while, it looked like the beat wouldn’t go on for the Singing Machine Co.
The largest manufacturer of home karaoke machines in North America, founded in 1982, was being crowded out of retail store shelves by newer, cooler products such as portable DVD machines, MP3 players, digital picture frames and GPS tracking devices.
At the same time, the karaoke industry was reeling from piracy lawsuits from record labels, who claimed hardware manufacturers were infringing on their copyrighted music.
Video games surged in popularity, making karaoke seem dated.
In 2008, the Singing Machine, headquartered in Fort Lauderdale, lost $3 million and the former management bailed. Its 100,000-square-foot warehouse in Ontario, Calif., was crowded with overstock and the 50-person staff was battered by layoffs. The end seemed assured.
But today, the Singing Machine is humming.
The publicly held company reported net sales of $48.9 million for the March 31, 2016, fiscal year-end period — an increase of 24 per cent over 2015 of $39.3 million. It reported net income of $1.7 million — a massive leap from $0.2 million the year before.
In an era where the digital landscape continues to dictate how people consume their news and entertainment, and cellphones and tablets have started to make even desktop computers obsolete, Singing Machine reversed its fortunes by focusing on what consumers want: fun.
Instead of sleek but plain surfaces and few buttons, the company started adding lights, colours and disco balls to their karaoke machines.
“We’re doing the opposite of what the trend in technology is,” says CEO Gary Atkinson.
“We’re pushing bigger speakers, bigger boxes, bigger lights. That stuff is what is really driving sales.”
Singing Machine has also kept up with the times. The company’s website breaks down its karaoke products into three categories:
The Classic Series, or analog machines that use traditional CD technology.
The Download Series, which use an 8-gigabyte USB flash drive to download songs from the company’s online store and outputs high-definition graphics via HDMI.
The Streaming Series, a 2.1-channel Bluetooth speaker with a remote control that doubles as a microphone. (The unit also streams HD karaoke videos on-demand to the TV via a Wi-Fi connection.)
Big-box retailers such as Walmart, Toys “R” Us, Target and Best Buy have embraced Singing Machine’s happier, buzzier machines.
Seventy-three per cent of 2015 company sales came from bricks-and-mortar retail stores, and 77 per cent of sales went to their five largest customers: Toys “R” Us, Walmart, Costco, Sam’s Club and Target.
Atkinson says the social aspect of karaoke is part of what has helped Singing Machine thrive alongside the digital revolution that has impacted every conceivable aspect of the entertainment industry.
“To us, the essence of what a real karaoke experience is — you have the microphone, the amplified sound so you can hear your voice through the speakers, all these different echo controls, having an audience listening to your performance.
“You can’t do that on a tablet or phone.”