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From the Where2sing.com forum:

Comps are a waste of time and money for the club/pub. They bring no extra revenue to the bar and in most cases subtract from the overall takings.
Its great for the ego driven singers to get their 5 minutes of fame but those are generally the singers that spend no money.
Their also the people who will whine and bitch about not winning and scream rigged if they don't like the person who won.
Which means its not even a good marketing tool!
Now don't get me wrong some of these people are my best mates and generally the people I get along with the best at shows...until the comp starts lol
Numbers always seem to drop during the heats and are then bolstered by the semis and final but in no way does it make up for the initial loss.
I don't mind the random giveaways but the minute you make it a 'talent driven' competition your making karaoke into something its not and taking the fun out of it for all but a select few.
I say keep the competitions for the talent quests and leave the fun for karaoke. We've only run 1 comp in 7 years and it certainly hasn't hurt our business infact I think its helped us be taken more seriously and keep long running shows.
Cheers,
Rob.
Submitted by Rob Deal on 31-03-2008

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