Karaoke industry faces the music

In its heyday, booking a room at the Parao Karaoke Club in Koreatown was tougher than, well, hitting the right note for "My Way."

But these days fewer people are coming to bellow their way through Frank Sinatra ditties and Spice Girls tunes. On the weekends, the most popular time for karaoke, room rentals have dropped by a third, owner Randy Chang said.

"People don't have money to celebrate anymore," Chang said. "A lot of parties are being canceled. Even advertising doesn't work anymore."

Karaoke isn't what it used to be. Since hitting a peak in 2002, annual sales of karaoke machines and software have plunged 80 percent to barely $40 million from $200 million. In 2008, the most recent data available, the drop was the steepest among all music products except for electronic player pianos.

On top of the slow economy, live karaoke clubs are losing some of their bread-and-butter wannabe pop stars and off-duty office workers to living room video games and online streaming services. At the same time, karaoke record companies are struggling with sky-high licensing fees while the traditional karaoke CD market is being throttled by illegal online downloads.

The industry is in a "protracted decline," said music trade group NAMM, formerly known as the National Association of Music Merchants.

Atlanta writer Angela Osiris Maxwell, 32, has abandoned her boxy karaoke machine and cut back on forays to karaoke bars.

Instead, like many others these days, she's created a homespun karaoke haven, hooking up video games to her TV and belting out "We Are Family" while digitally tracking her performance. Sometimes, during a game based on the popular singing competition "American Idol," she can even earn an insult or two from an animated version of cranky judge Simon Cowell.

Maxwell says she knows she's a lousy singer, but "you don't care because you're having such a good time," she said.

She's never far from a karaoke outlet. Aside from her Nintendo Wii console, she also runs sing-along tracks through her iPod or online through MySpace.