Karaoke versus keitai: karaoke's best years may be history.

FOR THE TWO DECADES after it began rather quietly in a Kobe bar in 1971, karaoke seemed almost recession-proof. As Japanese an invention as sushi and sumo, karaoke has invaded practically every corner of the planet, as much a fixture in Manila and Munich as in Myrtle Beach, North Carolina. In Japan alone, the karaoke industry last year earned over $7 billion, no chump change for a business that exists essentially to give the vocally impaired an excuse to impersonate Utada Hikaru or Mick Jagger (or, in this tone-deaf writer's case, Karen Carpenter).

But in recent years karaoke can't seem to find the right beat, becoming yet another victim of the 12-year downturn. A listless economy has wreaked disharmony in the karaoke business, triggering a wave of consolidation among companies that make, sell or use karaoke equipment. Shirou Kataoka, who's paid to survey the state of the industry annually, has been issuing some very sour notes.

"Bars and watering holes are our major market," says the director of the All-Japan Karaoke Industrialist Association. "It's where businessmen take their clients, or go themselves to relieve stress. Since corporate and individual consumption has slumped, bars are really feeling the pinch now."

But a discordant economy isn't all that ails karaoke. For one thing, artists just don't churn out the mega-hits customers like to sing, says Kataoka. "We once had songs so popular, everyone would sing them for a year. But nowadays hit songs for youth have a very short shelf life. For middle-aged fans, there are very few hits being churned out, period."

Nonsense tunes like 2000's "Dango-san-kyodai," a strangely popular ditty about three dumpling-brothers on a stick, for instance, displayed amazing longevity and cross-generational appeal, a phenomenon rare today, says the karaoke industry.

Another fundamental problem for karaoke companies is too much competition in the leisure sector, starting with cellphones. The pricey toy of choice for Japanese youth, mobile phone use has siphoned discretionary spending away from more traditional pursuits such as bowling, billiards and karaoke. Yoshihiro Watanabe, spokesman for XING, a Nagoya-based firm which offers cellphone users downloadable karaoke tunes, says subscribers to its "Docokara" karaoke service are "slightly up" since launching two years ago, though paling in comparison to its wildly popular cellphone melody site. XING's karaoke customers tend to be 20-something women and middle-aged men, Watanabe says, who like to rehearse before heading for the karaoke box.

But the karaoke industry has hit some bum notes of its own. Years of rapid expansion have left the business stuck with overcapacity. About a quarter of the so-called karaoke "boxes" (tiny cubicles furnished with state-of-the-art sound equipment) have been forced to shutter in recent years.

The Karaoke Industrialist Association occupies a cramped office in downtown Tokyo, where every desk groans under the weight of document stacks detailing such arcana as the preferred musical genre of young women (which runs to Ayumi Hamasaki and Glay, rather than Britney and 'N Sync) and how often the average customer visits a karaoke venue (slightly less than once a month). For someone immersed in the depressing statistics rolling in from Kyushu to Hokkaido, Kataoka manages to put on a good face. Reports of the industry's imminent demise, he maintains, are premature. "It's not that famous companies are exiting the business. What we're seeing is a streamlining of the industry, the same phenomenon unfolding in other areas of the economy as companies unload affiliates to focus on their core competencies. So while the number of karaoke manufacturers is declining, I don't consider it a crisis."

For the industry players still standing, however, survival is becoming dicey. In pursuit of a dwindling customer base, karaoke box companies are fighting a ruinous price war, allowing patrons in for pennies of gratis, in hopes of eking out a slim margin from food and drink sales. At Big Echo, a Tokyo-based karaoke box chain, fussy details like giant pink pastel Hello Kitty murals have been added in a bid to woo families, a still underrepresented consumer group. (If the customers on a recent weekday were any indication, however, the main consumers of Hello Kitty are females who haven't seen the inside of a grade school in some years.) Songs are no longer played via laser disc, practically medieval technology here--but delivered within seconds from a remote host computer via broadband. Songbooks the size of a telephone directory offer patrons a staggering selection of 30,000 songs, but there's no need to crack the book; any selection can be summoned in seconds from a touch-screen, hand-held remote. In their bid to keep clients coming back, karaoke boxes are gradually morphing into game centers, where singers can check their caloric expenditure, get their performance rated, of have their horoscopes read. The gimmicks are popular with after-five groups of office workers and can help keep the conversation flowing with couples on a date, says Haibara.

The industry is doing an about-face to appeal to a graying population

While karaoke has found an avid following on MTV, other parts of Asia, the US and Europe, probably nowhere has it so thoroughly permeated everyday life as in the land of its invention. Members of the Diet, Japan's parliament, have founded a karaoke league--not to lobby for the industry, but to sing together. A toy manufacturer has created a bit karaoke mike for tots, and auto manufacturers offer car karaoke systems, a feature standard aboard bus tour coaches. Revelers at cherry blossom viewing sessions haul karaoke appliances onto the lawn and, appropriately enough, into cemeteries, to croon the night away between doses of beer and dried octopus legs.

"It's true that young people aren't spending as much on karaoke because of cellphone use," says Kikumi Haibara, a spokeswoman for Daiichikosho Co., Ltd., one of the largest chains in Japan. "But karaoke is a fixture of Japanese culture. It's entertainment as well as a way of communication. It's here to stay."

Japan's most entertaining--or annoying, depending on your point of view--invention dates back three decades. "The word 'karaoke' was trade lingo in the recording industry," recalls Kataoka. "Singers who were about to go on tour would discuss whether to bring a band along, or whether they would simply perform 'karaoke,' " to recorded instrumental music. (The word karaoke is a combination of kara, empty, and oh-ke, the first two letters of the Japanized word for "orchestra.")

Karaoke is fighting a ruinous price war, charging pennies or nothing at all

Japanese bars typically occupy less floorspace than an average American living room, so squeezing a bulky jukebox into such a crawlspace, not to mention financing the purchase, was out of the question for most Japanese pubs in the late 60s. The answer, for a few drinking spots in Osaka, was to install mini-jukeboxes. The hallowed invention itself is credited to an unknown musician, Daisuke Inoue. In 1971, Inoue and a few friends started a company called Crescent, which rented out a few special mike-rigged jukeboxes to bars. Equipped with a selection of 40 tunes, the music was not merely instrumental versions of pop songs but melodies arranged in a key and rhythm deemed optimal for amateur crooners. Inoue added echo effects and a coin-collection device. At [yen] 100 for five minutes, the chance to sing couldn't be had for, well, a song, but it was a price that delighted customers were more than happy to pay.

Another high-water mark for karaoke was in 1985, when an entrepreneur in Okayama Prefecture, western Japan, got his hands on an old shipping container and fixed it up into tiny private cubicles. The "karaoke box" was born. Usually the size of a walk-in closet, with a table, banquette seats and video monitor crammed in, the karaoke box allowed the industry to expand into both the suburbs and urban office jungles. The cheap cost of admission also allowed the industry to go downmarket, drawing teens and 20-somethings who rarely patronized the bars and large hotels where karaoke normally blared.

Karaoke's best years may now be history. Last year's Karaoke White Paper reported that peak-year patronage of 60 million customers has plunged by almost one-fifth, to 48 million users. The number of karaoke venues has declined by almost as much, and two major equipment makers, Giga Networks and Clarion, have exited the business.

Like many other consumer businesses in Japan which have come to cater to the whims and tastes of the young, the karaoke industry is trying to appeal to a rapidly aging society. Kataoka has a pitch well-rehearsed for silver singers: "It's an extremely forgiving pastime. Anyone can do it. It's participatory. Listening to music is a passive activity, but karaoke is good for health. As a hobby it will increase in popularity." A round of "My Way," Grandpa?