Part 21. Karaoke and Audio Devices — Habits Made by Spaces and Machines

The Genealogy of Payment Habits — A Historical Hint Book for New-Content Business Models Volume 2 · Part 21

Why Did Karaoke Grow So Large Only in Korea and Japan?

As of 2023, Korea had approximately 28,000–30,000 noraebang venues, among the highest concentrations in the world relative to population. Japan had more than 9,700 karaoke-box businesses, and the actual number of singing rooms was far greater when the rooms in each business are counted. The United States has karaoke bars but almost no private-room noraebang. China’s KTV market ranges from luxurious entertainment venues to mass-market chains and differs from Korea’s small-room culture. In Southeast Asia, home karaoke machines became widespread.

Why did the habit of “paying to sing in a private room” take root so powerfully in Korea and Japan? The technology is the same everywhere: microphones, accompaniment machines, and screens can all be exported. Payment habits cannot. The difference in the size of karaoke industries comes not from technology, but from culturally defined spaces for payment.

The Invention of Karaoke — A Habit-Space Made by One Hundred Yen

In 1971 in Kobe, Hyogo Prefecture, Japan, Daisuke Inoue, born in 1940, was a musician who played accompaniment in bars. A regular customer going on a business trip asked for a way to sing without Inoue there to accompany him. Inoue built a machine that played prerecorded backing tracks. He named it the 8-Juke. Insert a one-hundred-yen coin and it played one song.

This was the beginning of karaoke—Japanese for “empty orchestra.” Inoue considered it something anyone might think of and did not apply for a patent. Daiichikosho, founded in 1973, later commercialized karaoke. Inoue created a multibillion-yen industry without receiving its financial rewards. In 2004, he received the Ig Nobel Peace Prize for teaching people “an entirely new way to tolerate each other.”

The heart of the invention was not the accompaniment machine. It sold “the experience of becoming the main character.” If the earlier bar habit was to listen to music, karaoke commercialized the experience of performing it: holding a microphone without stepping onto a stage, and singing to accompaniment without being a professional. That experience was the reason people paid one hundred yen.

Karaoke spread rapidly through Japanese bars, snack bars, and restaurants during the 1970s and 1980s. Karaoke boxes appeared in the late 1980s. Earlier karaoke meant singing in front of strangers in a public hall; a karaoke box let groups of four to ten acquaintances sing in a private room. This shift mattered. Moving from public performance to private experience reduced embarrassment and allowed more people to sing. Through its networked DAM—Daiichikosho Amusement Multimedia—series, Daiichikosho supplied more than half of Japan’s karaoke-box market as of 2023.

The Korean Mutation of Noraebang — The Same Technology, a Different Habit-Space

The first Korean noraebang is commonly recorded as having opened in Busan in 1990. Karaoke entered Korea around the 1988 Seoul Olympics, but because official access to Japanese culture was restricted, its machines cleared customs as “audio equipment.” The business reached Seoul in 1991 and grew rapidly from 1992 to 1994.

Korean noraebang then developed in a different direction from Japanese karaoke boxes.

First, beverage service disappeared. Drinks and snacks are an important part of Japanese karaoke-box revenue. Korean noraebang simplified the model to a time charge and concentrated on being a “space for singing.”

Second, it combined with company-dinner culture. Korean workplace gatherings settled into a pattern of dinner, drinks as a second round, and noraebang as a third. This is a collective payment habit: individuals do not settle separately; a manager or company pays and records the cost as an employee-entertainment expense. This group-payment structure enlarged Korea’s noraebang market.

Third, the machines themselves became Korean. Kumyoung Entertainment, founded in 1989, and TJ Media, founded in 1992, grew into the country’s two leading noraebang-equipment manufacturers. Kumyoung maintains its own music database and held about 45–50 percent of the domestic equipment market as of 2023. Through its “TJ Noraebang” brand, TJ Media helped establish the system of paying music-usage fees to the Korea Music Copyright Association (KOMCA). Roughly ₩2–3 in royalties per karaoke performance is distributed through KOMCA.

The number of noraebang peaked at about 37,000 in 2008, fell to approximately 35,000 in 2019, and continued down to roughly 28,000–30,000 in 2023. The rise of coin noraebang and the pandemic compounded the decline.

The Coin Noraebang Revolution — Small Payments Meet the Individual

A new form entered Korea’s noraebang market in 2013–2014: coin noraebang. It expanded rapidly from 2017 to 2019, rising from roughly five thousand venues in 2018 to an estimated seven to eight thousand in 2022.

Where a conventional noraebang rents a room by time—thirty minutes or one hour—a coin noraebang offers a smaller, simpler space where a customer inserts ₩500–1,000 and sings one or two songs. Its unit cost is lower than the ₩8,000–15,000 charged for thirty minutes at a traditional venue, and each room is minimized for one or two people.

The increase in single-person households helped coin noraebang grow. Renting a room alone at a conventional venue can feel awkward or inefficient; paying for thirty minutes alone feels wasteful. At a coin noraebang, singing just one or two songs is natural, making an impulsive visit easy. The user base changed noticeably: more teenagers came alone, and reports even described employees at large corporations visiting during lunch breaks.

This is the same payment psychology as an arcade coin: small, immediate, once. Noraebang was redefined from “renting a place” to “buying an experience.” Coin venues coexist with conventional noraebang while capturing new customers—solo and spontaneous visitors.

A Specialized Field — Karaoke Apps Coexist with Offline Noraebang

Karaoke apps appeared as smartphones spread. Smule, founded in 2008, gained more than one hundred million users worldwide. With “AutoRap,” “Magic Piano,” and the “Sing!” series, it remained near the top of the singing category in Korea’s app stores for years.

Korea also had local services. Everysing, launched in 2015 by an SM Entertainment subsidiary, included artists’ official backing tracks and offered features for singing a duet with them. The service ended in 2022 because the cost of securing official tracks was out of balance with revenue. After 2020, another trend emerged: TikTok duets instead of karaoke apps.

Yet these apps did not replace offline noraebang. The reason is simple. Noraebang sells more than the act of singing.

An offline noraebang sells three things at once: the act of singing; a shared experience with the people doing it together; and the feeling of being in a “special space” separated from everyday life. An app supplies only the first. The second and third require a physical space.

The core of company-dinner noraebang is the ritual of “doing it together.” Music can be heard anywhere, but passing a microphone around in the same room happens only offline. Use of Smule in Korea did not reduce visits to noraebang. Smule provides a quiet solo-recording experience, while noraebang is a space for group experience. They satisfy different purposes and coexist.

From the Walkman to AirPods — The Genealogy of Listening on the Move

The history of devices that freed music from a fixed place is also a history of payment habits.

Sony Walkman TPS-L2, released in July 1979: The first mass-market portable music device to combine a cassette player and headphones launched in Japan for ¥33,000. It sold about three thousand units in its first month, more than thirty thousand in its first two months, and roughly 1.5 million during its first year. By 2009, cassette-based Walkman sales alone had reached approximately 220 million, with all Walkman formats totaling about four hundred million. Music had previously been heard at home through an audio system, in a car through a stereo, or in public through radio. The Walkman created a new habit-space: “listening to music alone while moving.”

Apple iPod, announced October 23, 2001: Steve Jobs introduced the 5GB model with the phrase “1,000 songs in your pocket.” It launched at $399. Moving beyond the CD player’s limit of twelve to fifteen songs on a disc, it made an entire library of digital music portable. Annual sales passed ten million after the first iPod mini launched in 2004, and cumulative sales exceeded four hundred million before discontinuation. Apple sold the device but connected it to music sales through the iTunes Store. It was an early hardware–software ecosystem business model.

First-generation Apple AirPods, released December 2016: AirPods drove true wireless stereo earbuds into the mainstream. They launched at $159. Bluetooth earphones had existed before, but had never become a widespread habit. AirPods differentiated themselves through one-click pairing with the iPhone, rapid connection through the W1 chip, and integration with Apple’s ecosystem. Depending on the analyst, estimated revenue for the AirPods and AirPods Pro lines in 2019 ranged from roughly $6 billion to $12 billion. Apple held about 29–31 percent of the global TWS earbud market in 2022. AirPods succeeded not because of sound quality but because of convenience and ecosystem integration. Once an iPhone user buys AirPods, leaving Apple’s ecosystem becomes harder. The device performs the role of a subscription.

The Business Model of Noise Cancellation — Blocking Noise Becomes a Product

The first-generation Bose QuietComfort, released in 2000, pioneered the commercialization of aircraft ANC headphones, converting military technology into a consumer product. The initial price was $300. Sony’s 1000X line later defined the market: MDR-1000X (2016), WH-1000XM2 (2017), XM3 (2018), WH-1000XM4 (2020), and XM5 (2022). According to market researcher IDC, the WH-1000XM4 ranked first in global noise-canceling headphones in 2020–2021. Its Korean launch price was about ₩350,000.

What these products sell is not sound quality. It is “freedom from noise.”

Modern urban life—subways, aircraft, cafés, offices—is filled with noise. Noise cancellation offsets external sound with inverse sound waves, creating a substantially quieter environment. The global ANC earphone and headphone market grew about 40 percent year over year in 2020, driven by soaring demand for “focus tools” as remote work increased. Apple AirPods Pro, released in 2019 at $249, exceeded sales expectations in its first quarter, and upgrades from standard AirPods to AirPods Pro rose sharply.

This is a case in which the reason to pay for a listening device moved from “making better sound” to “removing worse sound.” Headphones priced at ₩350,000 seem expensive as a music device, but reasonable as a tool for concentration. A change in framing lowered price resistance.

The Hi-Fi Audio Market — Conditions That Lift Prices into the Millions of Won

At the opposite extreme of the audio market is the enthusiast hi-fi market. The Beolab 90 speaker system from Bang & Olufsen, the Danish company founded in 1925 and a supplier to the Danish royal court, launched in 2015 at approximately $80,000 a pair. One MC611 monoblock power amplifier from McIntosh Laboratory, founded in the United States in 1949, costs roughly $10,000; in enthusiast communities, decades-old used models can trade above their original prices. Flagship speakers from America’s Wilson Audio range from tens of millions to hundreds of millions of won.

The reason to pay in this market is not sound quality. More precisely, sound quality matters, but it is not the whole reason.

Hi-fi buyers cite the completion of a personal listening room, expression of taste and aesthetics, belonging to a community of shared interest, and the pleasure of collecting—amplifiers, turntables, and cables are all collectible. These motives go beyond “hearing better sound.” They materialize belonging, identity, and taste.

Hi-fi shops on Seoul’s Cheongdam-dong audio street, including HiFi Club and Sound Bar Korea, are not simple retail spaces. They have listening rooms, hold product demonstrations, and host community events. Customers hear imported brands such as Sonus Faber in person before buying. The payment-space expands beyond the physical price of the product into “a field of experience.”

The LP, or vinyl-record, market connects to hi-fi. According to the Recording Industry Association of America, US LP revenue exceeded CD revenue in 2020 for the first time in thirty-four years. By units, LPs surpassed CDs for the first time in 2022, when about forty-one million LPs sold in the United States. In 2019, Sony marked the Walkman’s fortieth anniversary by releasing the NW-A100TPS, a retro edition combining the classic design with modern Hi-Res Audio. It sold out immediately. People do not buy LPs only for sound quality. The “analog ritual”—taking out a record, wiping off dust, and carefully lowering the needle—is itself a reason to pay. Inconvenience becomes value. The convenience of streaming made the LP’s “inconvenient ritual” more valuable.

Failure Case — The Bankruptcy of Jawbone

In 2017, Jawbone, founded in 1999 under the legal name AliphCom and once considered one of Silicon Valley’s most innovative hardware startups, filed for Chapter 7 liquidation.

Jawbone gained attention with the Jambox Bluetooth speaker, released in November 2010 at $199. Considered one of the first hit Bluetooth speakers in the United States, it led the premium market with a small, polished design, surprisingly good sound, and ease of connection. In 2011, Jawbone expanded into the UP fitness-tracker line, but early defects led to a massive recall. UP2, UP3, and UP4 followed but lost share to Fitbit. By 2014, Jawbone had raised about $800 million from investors including Andreessen Horowitz and Kleiner Perkins. Investor losses reached hundreds of millions of dollars.

In audio, major companies including JBL, Sony, and Bose committed fully to Bluetooth speakers, pushing Jawbone back on both price and brand recognition. Chinese low-cost brands such as Xiaomi and QCY began offering similar functions for one-tenth the price of a Jambox. After the Amazon Echo launched in 2014 and Google Home in 2016, a smart-speaker market formed and Jawbone’s Bluetooth-speaker position became even more ambiguous.

Its move into fitness trackers produced the same result. Fitbit was firmly established, and when the Apple Watch appeared in 2015, smartwatches absorbed the fitness-tracker category. Jawbone owned an ecosystem in neither market.

Hardware devices struggle to survive without a platform. AirPods have Apple’s ecosystem, and Sony’s XM series has the Sony brand and Sony Music. Jawbone had only a device; the moment that device lost competitiveness, nothing came next.

Hints from This Part — Habits Made by Spaces and Devices

Hint 1: Where is the “space” of your content?

Moving karaoke from bars to private boxes opened a new audience. Coin noraebang opened another audience of solo customers. Even with the same experience, a different form of space produces a different payment habit. The physical or digital space in which your content is consumed is a basic condition of its business model. Change the space and the business model may change.

Hint 2: Can inconvenience become value?

An LP is less convenient than streaming, yet that inconvenience became a reason to pay. Noise-canceling headphones justify the inconvenience of wearing headphones with the convenience of removing noise. What experience in your content is “inconvenient but valuable”? It may provide a position distinct from convenient competitors.

Hint 3: Are you trying to compete with hardware alone, without a hardware–software ecosystem?

AirPods sell because the iPhone ecosystem exists. Sony XM headphones command a premium because they have Sony’s brand and patented technology. Jawbone had only its devices. When designing a business model that includes hardware, first confirm that an ecosystem—a platform, service, or community—exists to sustain repeat purchases.

The music-industry section, Parts 15–21, ends here. The next section moves to the screen industry. Streaming changed video as it changed music, but in a different way. Through cinemas, television, video rental, and OTT services, how have people paid to watch screen content?

Kim Dongeun · WhtDrgon@MEJE.kr · 2026