Once HFA grants the license, it’s up to Vogt’s team to re-create the song from scratch. Vogt’s long-time producer gives the song repeated listens to identify its key, the notes of the melody, what instruments are playing, and how to reproduce the exact sounds. If he needs backup vocals, he has a network of session singers across the country who can send in parts virtually. Vogt’s producer can knock out a song like “Royals” in just a few hours—the chart-topping song from New Zealand wunderkind Lorde is just her voice layered over a kick drum, some snaps, and a few other embellishments. But it took several days to unpack the many moving parts of “Thrift Shop,” Macklemore and Ryan Lewis’s brassy ode to frugality. “When you get into the Lady Gagas and the Katy Perrys, deciphering what’s going on takes time,” Vogt says.
When the song sells on iTunes, the publishers, who pay the songwriters, usually get about a dime, as determined by the license laws’ statutory rate (Apple's own cut is about a third). The original performers get nothing, unless they have a writing credit. Usually, the performer isn’t missing out on much money—most customers opt for the karaoke cover instead of the original only for rare, particular uses.
In the UK, things are a little different. There, because the charts are based on single sales only, popular songs often have a long lag time between their premieres and their release dates in order to ensure ample promotion time and, hopefully, an impressive chart debut. As a result, there’s actually a history of mimic cover versions becoming hot sellers in the absence of the original. This year, for instance, at least five different versions of Icona Pop’s “I Love It” charted, and in 2012, a cover of Maroon 5’s “Payphone” actually cracked the top 10. The success of the latter was controversial enough that The Telegraph hunted down the label manager behind the song, who promised to swear off such opportunistic releases and return the money he made. (The U.S. isn't immune to this phenomenon, either: As Idolator noted back in 2008, similar covers have reaped significant sales when the originals didn't hit iTunes right away, and the tradition dates back well before the Internet.)
Vogt estimates he has hundreds of competitors in the digital market, but even he’s not entirely sure how many are out there. On iTunes, identical versions of the same karaoke cover are often released with different titles and artwork by generic-sounding record companies that can be difficult to track down, as the The Telegraph and Idolator stories illustrate. Many companies don’t stick around for more than a few years. “I used to try and keep track, and they just come and go all the time,” Vogt says.
Vogt won’t say exactly how much the iTunes covers bring in, other than five figures. That appears to be just a small slice of his company’s total operation—in 2009, Columbus Business First reported that Karaoke Warehouse's annual sales topped more than $10 million with annual growth exceeding 20 percent. But Vogt says iTunes's global stores and the opportunities to sell his digital products internationally make iTunes "a significant portion" of his business.
“We’re bound by our music of the moment, and we all want to participate in it now,” he says. “To me, it’s a crazy cultural phenomenon. They didn’t have that a generation ago. People are out there producing their own creative music and videos. It’s a wonderful thing if you think about it.”