Live band karaoke originates from the late '70s/early '80s punk scene in New York City, where it remained more of a "jump on stage jam session" for years. A Montreal band claims to have hosted the first "live band karaoke night" in 2004. It has become so successful that now you can "sing with a band" in most large cities, in all kinds of venues.
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It's a dream of so many people to perform on a stage backed by a live band, but so few get the opportunity. We're giving people the ability to live out their dream and just go out and have fun!
John Heald, Senior Cruise Director, Carnival Cruise Line
Sometimes it is even more entertaining to just sit back in the crowd and enjoy the entertainment value that live band karaoke brings.
Wikipedia
HariKaraoke Band on FOX Morning News! Watch on YouTube.
Live Band Karaoke, Chicago FOX News, April 2006. Watch on YouTube.