I haven't seen any real karaoke joints in the states, certainly nothing like the place depicted in the movie Lost in Translation. In my experience, karaoke is something that happens as an after-thought in dingy suburban bars and restaurants, and even there I think the novelty of the idea has largely worn off.

Apparently, even in Japan, where interest in karaoke peaked in 1996, the idea is waning in popularity, leading some businesses in recent years to try putting a new spin on the concept to revive interest. Aria Blu in Tokyo offers private karaoke rooms with a serene, classy ambiance, a far cry from standard karaoke boxes which can be devoid of personality. Each karaoke room at Aria Blu has a theme (for instance, "Hollywood", "botanical," and "lagoon"), and gourmet meals prepared by real chefs are served to make it both a dining and entertainment experience (leading people away from the usual tradition of eating in one place and seeking entertainment in another). Aria Blue targets people in their 20s and 30s, though it also attracts business people looking for a venue for company parties, as well as families with young children.

Other establishments offer foot spas and jacuzzis, or anime-themed rooms and meals. Apparently, a leading cause of the slump in the karaoke industry is the competition from electronic gadgets, which takes up more and more of young people's entertainment budget and time.

Source: The Nikkei Weekly (subscription)