According to G4, the upcoming Karaoke app for the Xbox 360, which is coming thanks to a partnership between Microsoft and The Karaoke Channel, will have a library of over 8,000 sings for users to sing along with.
The interesting part here is that the game will have a payment model based on time. Users will be able to download the app for free but will require a rental of multi-hour blocks for functionality. In other words, you can spend some Microsoft Points to get full access of the entire song library for say 2 or 6 hours.
The app will have SmartGlass features and Achievements, while also integrating Avatars. Expect the app to launch sometime this holiday season.