I think they're called Silent Disco's rather than Headphone Disco's.
Basically, hook up the audio output to a radio/infrared emitter or two, give the audience radio/infrared headsets to wear and the audio comes through to them. Used lots in built up places after a certain time to help keep clubs running without risk of being closed down due to noise pollution.
I know how they work cos my 'real' job is as a sound technician for a simultaneous translation service, so I rig up and build these setups just for people to hear translated languages rather than DJ music. Though I suppose I could take my Vestax and laptop down one day....
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