Karaoke bars are anticipated to more closely focus on their target markets to counteract declines in demand
New York, NY (PRWEB) December 23, 2014
Escalating external competition and sluggish growth in alcohol expenditure have harmed the performance of the Karaoke Bars industry over the five years to 2014. Declines were exacerbated by simultaneous dips in consumer spending during the recession. Nevertheless, the primary impetus behind the industry's structural decline has been the continued shift of karaoke fans away from karaoke bars and into the comfort of their own homes. According to IBISWorld Industry Analyst Stephen Hoopes, “Largely due to technological advancements, there is currently an array of video game and internet-based karaoke bar substitutes.” Consequently, over the five-year period, industry revenue is estimated to slightly decrease.
Console-based karaoke-style video games have grown in popularity because they can digitally track a player's performance and provide feedback. Consumers are also increasingly opting to purchase or pirate karaoke and sing along with tracks on the internet. Each of these developments has lured consumers away from karaoke bars, which is particularly troublesome for industry operators, as the majority of their revenue is sourced from alcoholic beverages consumed within their establishments.
In response to the shift away from the karaoke bar, industry operators are investing in new technology to win back old customers and attract new ones. Capital expenditures for domestic establishments include wireless microphones and wireless song request systems. “Karaoke systems also now offer touch-screen playlists that are easy to use and backed by an impressive library of new and old songs, listed digitally with an on-screen search function,” says Hoopes.
The Karaoke Bars industry operates with a low level of market share concentration. In 2014, the four largest companies in the industry are expected to generate an extremely small percentage of the industry's revenue. The industry's market share concentration has been increasing gradually in recent years, largely due to underperforming players exiting the industry rather than any form of merger and acquisition activity. Due to the small and localized nature of karaoke bars, the industry's level of concentration is forecast to remain low over the five years to 2019.
Over the five years to 2019, industry revenue is anticipated to continue its descent. As a means to counteract the industry's structural decline, karaoke bars are anticipated to more closely focus on their target markets in the years ahead. According to New Strategist, individuals under the age of 35 spend 51.0% to 58.0% more than the average individual on beer and ale at restaurants and bars. Despite technological investments to draw in these consumers, the number of industry establishments is anticipated to continue its structural decline in the years ahead.
For more information, visit IBISWorld’s Karaoke Bars in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes bars that offer karaoke entertainment along with food and drinks. Karaoke is a form of interactive entertainment or video game in which amateur singers sing along with recorded music (or a music video) using a microphone and public address system.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
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