Karaoke is a rather conservative business, where the top songs rarely change, and the club formats even less so. Let’s look at the main types of clubs, compare them, and find out which ones have the most attractive profitability for investors.
1. Classic large karaoke club
This format is popular all over the world, except perhaps in Asia. In Malaysia, Japan, and China, karaoke rooms are incredibly popular, where people spend their evenings after work with a microphone in one hand and a glass of something strong in the other.
A large karaoke club is usually a space of 100 m², and in some cases, 300 or even 500 m². I strongly advise against opening such large karaoke clubs, as it’s difficult to recover these investments quickly.
Moreover, such clubs come with huge risks, including reputational ones. The logic is simple: the bigger the club = the more seats = the longer guests will have to wait for their turn to sing.
Often this waiting turns into a conflict, which later escalates into a large-scale brawl with all the consequences.
In 95% of cases news with headlines: ‘Another fight in a karaoke club…, A guest in a karaoke club who threatened with a knife was detained…’ and other similar ones are exactly from such overly large clubs.
The optimal space for this format is 100-200 m². The golden mean for the number of guests is 10-15 tables, each seating a group of 2 to 6-8 people.
These clubs also usually feature one or more active bar counters.
One of the features of this format is the presence of a stage where a guest can perform and show off their talent.
The key figure in a karaoke club is not the administrator or even the manager, but the sound engineer. He/she manages the queue, takes orders from guests, and helps singers during their performance by adjusting the necessary parameters for enhancing their voices.
The process of taking orders is strictly regulated by the club’s rules. The sound engineer ensures that they are followed to prevent any conflict. These are fairly simple rules that allow guests to place orders in strict sequence — all visitors are in equal conditions, except when a Crazy-song is ordered.
Another feature is the presence of backup vocals. Sometimes the sound engineer himself performs this role, and in more expensive clubs, there may be 1-3 backup singers who will support you during your performance and make it truly spectacular.
In such clubs, either a symbolic entrance fee is charged or a minimum deposit is required.
A mandatory element of a large karaoke club is a dance floor, which typically takes up 30-40% of the club’s space. Guests love not only to sing, but dancing takes an honorable second place after singing.
An increase in dancing guests is observed during the so-called music breaks when the sound engineer wants to liven up the atmosphere. These breaks last no more than 15-20 minutes and are held every 1-2 hours.
2. Karaoke Rooms
These are spaces from 8-10 m² to 50 m² where a group of guests can celebrate a birthday or simply have fun for a few hours on a day off. Visitors rent the room for a certain number of hours, allowing them not to wait for their turn like in a large karaoke club and freely use the karaoke system and microphones, singing whatever and whenever they want.
These rooms also offer service: you can provide your own menu and bar or allow guests to use delivery services from other establishments. Sometimes these rooms offer additional services, such as playing video games in some cases.
For karaoke room visitors, it’s an intimate place for singing. In Japan, the habit of singing karaoke almost every day is ingrained at the DNA level. In other countries, karaoke rooms are most often used as a place for celebrations and less often as an excuse to gather with friends.
3. Combination of a Large Karaoke Club with One or Several Karaoke Rooms
This is the most popular format because it caters to two types of audiences: lovers of noisy parties in the main hall and those who prefer privacy in a karaoke room.
Typically, such karaoke establishments have one large common hall, and rarely two or more. However, there are almost always at least 2-3 karaoke rooms. In countries like Kazakhstan, clubs with 5 or even 10 rooms are very popular.
4. Karaoke Public
The newest format among the ones presented is a combination of a disco and a karaoke club, but with its unique features.
Uniquely, there is no queue in the club. Whether a particular song appears on the playlist or not is determined solely by the sound engineer. It’s the sound engineer who controls the atmosphere in the club, and the songs create that atmosphere.
You will never hear a sad song in a karaoke public, and certainly not anything from Russian chanson.
Another unique feature: anyone in the venue can sing a requested song if the person who ordered it doesn’t take the microphone in time.
Alternatively, the guest who ordered the song can sing a duet with another club visitor if that person also wants to sing the song, as there is a second microphone available.
In a karaoke public, everyone dances and has fun, first because it’s half disco, and second because there are no seating areas.
Thirdly, there is no kitchen either. Visitors manage their mood solely by the number of cocktails they drink at the active bar counters.
The space for a karaoke public ranges from 80 to 150 m². The most important criterion for the success of this format is location. It should be in a so-called “tourist zone,” which is a tourist magnet in the city.
A public will not work in a residential area or in a city with fewer than 1 million tourists per year.
Guests in public venues don’t stick around for long—the average stay is 1-2 hours. This means that over the course of a night, hundreds of karaoke-goers will come and go, unlike traditional clubs and rooms where people stay from opening to dawn.
A comparison table of all formats for the investor
| Classic club | Karaoke rooms | Classic club + karaoke rooms | Public | |
| Area of the venue, m² | 100 – 200 | 10 – 50 | from 150 | 80 – 150 |
| Investment in kitchen setup | ✓ | ✓/— | ✓ | — |
| Search for unique tourist-attracting location | — | — | — | ✓ |
| Opportunity for additional karaoke monetization | ✓ | ✓ | ✓ | — |
| Hourly karaoke rental | — | ✓ | ✓ | — |
| High likelihood of conflicts | ✓ | — | ✓ | — |
| Initial investment | Maximum | Minimal | Maximum | Average |
| Average return on investment period | from 15 months | from 6 months | from 20 months | from 12 months |
| Format lifecycle | 3-5 years | ∞ | 3-5 years | ∞ |
☝Conclusions
Each format has its pros and cons, as well as many nuances. My experience shows that in a city with a population of over a million, 100+ karaoke clubs can operate, and each of them will be “packed to the rafters.” One of the main success factors is location, and the second is significant investment in sound equipment and proper sound settings. Trust me, karaoke lovers will choose your club for its killer sound. So, this kind of investment is a long-term game.
It’s impossible to say which format will bring the most dividends without understanding the location, population, cultural features, logistics of tourist flows, and other factors. I’m a practitioner, not a business guru, and only together with you can we discuss the relevance of a format for your specific location and calculate all the business indicators.
If you’re thinking about opening a karaoke venue, feel free to reach out for a consultation 😉
