Karaoke is definitely a big thing throughout much of Asia. I had never done it in the US but now have done it as part of business entertaining in Japan, Korea, and China. The basics are the same in all three, with some minor differences. Definitely much different than what I expected karaoke to be like in the States. In the US, I figured it was a bar where you could get up on stage and sing your heart out in front of anyone who was there. This style may exist here, but that isn't what businessmen seem to use for their entertaining…
You (and when I say you, it is generally guys only - sexual equality is a bit further behind in Asia than in Europe or the US) start by walking into the Karaoke bar/business club and then a hostess takes you to your room. Usually the room is private, but sometimes it is semi-private - there may be a few small groups scattered around the room. At this time, the area you will sit in is empty and has much more couch space than you need.
Your group spreads out on the couch and then some girls join you (generally 1 per guy in your group). How you end up with a particular girl next to you varies some between the different countries I've done it in - China and Korea had a line up of girls where you select one who stays with you the whole time you are there. Japan had girls who joined you and every once in a while the girl there would change (shift changes, or something like that). The girls are generally very pretty, and have the job of keeping your glass full (as the girl in the picture below is doing), making conversation with you (not always easy with me, given that few speak English, except in Tokyo where our customers seem to like to go to clubs with foreign girls), looking pretty, and otherwise keeping you happy.
No, the girls are not prostitutes (at least most aren't - the one I was with in Beijing made it obvious that she was available after the karaoke session was over should I desire the chance to make some personal music with her). And there are variations in how much physical contact is allowed, from the girl sitting a few centimeters from you to her just about sitting on you.
Next step is for drinks to be ordered and served. Drinks are ordered by the bottle, and are generally the type that require some sort of mixing (whiskey and water, etc.). If businessmen go to the same club a lot, they will have a bottle marked with their name waiting for them. They order a bottle once and then work from that as they entertain. What is left is put in storage until the next time they come back. That is if they don't finish it - these guys sure are heavy drinkers.
After drink are served, and often some finger snacks, the singing begins. Books are passed around which list the songs available. You choose a song, it is entered, and then you watch a monitor with the words on it and sing these along with the music. Asians seem to like love songs, and sing enough (whether at karaoke bars or other gatherings) such that they are pretty good. I haven't had another American in the room with me yet at one of these to see if it is just me who is bad at this, or Americans in general.
In Japan and China, the singing is done right from where you sit at the couch (as above). In Korea, you stood up at a microphone and sang (with your karaoke girl standing next to you arm in arm).
For all this, you generally pay a charge for the room, pay for the drinks (yours and the girls), and pay a tip for the girls. Japan is the most expensive at about $200 a person for 4 hours in a private room and a karaoke girl for each guest, Korea runs about $125 a person, and China was about $65 a person. Of course, there is much variation to this. It seems you can also go to bars where you pay less, but get less (less girls, less privacy, etc.).
I haven't figured out what the local women think of all of this. Asians generally get married relatively young (by mid to late 20's), so all of the businessmen I am with are married. I talked with one of the girls in the Korea office and she seemed to think that the men went out for drinks, but nothing more. Another girl knew of the business clubs, but seemed to think only slimy types of people went there (and of course, not her fiance). She called the business clubs the 'second round' and also talked about the 'third round' (what the girl in China was offering). I wasn't going to tell her, but I think that it is more than just the slimy people who go there, considering how many of these business clubs there are (seems to be more of them around than restaurants). Guess I am letting the cat out of the bag if she reads this update...
Given my American background, this type of entertaining definitely makes me feel a bit guilty. But the cultures here seem to accept it (and I've never seen anyone go for that third round, so they do seem to draw the line). And I am single, so not too much guilt as I enjoy experiencing this.