Karaoke machines were initially placed in restaurants and hotel rooms; soon, new businesses called karaoke boxes, with compartmented rooms, became popular.

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Inoue, a drummer, was frequently asked by guests in the Utagoe Kissa where he performed to provide recordings of his performances so that they could sing along.

Realizing the potential for the market, he made a tape recorder-like machine that played songs for a 100-yen coin each.

Home theater systems took off, and karaoke went from being the main purpose of the stereo system to a side feature.

As more music became available for karaoke machines, more people within the industry saw karaoke as a profitable form of lounge and nightclub entertainment.

Many artists, amateur and professional, perform in situations where a full band/orchestra is either logistically or financially impractical, so they use a "karaoke" recording; they are, however, the original artists.

(This is not to be confused with "lip synching," in which a performer mimes to a previously produced studio recording with the lead vocal intact.) From 1961–1966, the American TV network NBC carried a karaoke-like series, Sing Along with Mitch, featuring host Mitch Miller and a chorus, which superimposed the lyrics to their songs near the bottom of the TV screen for home audience participation.

Lyrics are usually displayed on a video screen, along with a moving symbol, changing color, or music video images, to guide the singer.

In several Asian countries such as China, Cambodia or the Philippines, a karaoke box is called a KTV.

, is a form of interactive entertainment or video game developed in Japan in which an amateur singer sings along with recorded music (a music video) using a microphone.