FTC weighs in against BurnLounge
Beginning musicians tend to be big dreamers. And there are an awful lot of us--Guitar Center's got nearly 200 stores now taking in more than $450 million per quarter, and you know that most of those buyers are thinking, at least in the back of their mind, that they'll be the next Jimmy Page. Or Joe Strummer. Or Kurt Cobain.
As you might expect, this combination tends to draw a lot of, shall we say, questionable businesspeople to the music industry, particularly the lower reaches. Over the years, I've heard it all: unscrupulous managers, publicists and promoters who take up-front payments and deliver nothing in return, small labels that collapse without a trace, big labels that ensnare artists into perpetual servitude, promoters and clubs forcing bands to pay up front for the "privilege" of playing (hint: if all the bands are paying to play, most of the people in the audience are probably going to be other bands), charging artists an up-front fee to appear on a CD compilation that will be mailed to radio programmers (who will throw it in the trash can, as they do with most unsolicited discs, especially pay-for-placement compilations), and on and on and on.
Most of these pitches aren't illegal, but all of them take advantage of the gullibility--or optimism, if you will--of musicians. Common phrases include "you've got to believe in yourself" and the time-tested "you have to spend money to make money."
A couple weeks ago, a fellow musician asked me if I'd ever heard of a company called BurnLounge. He called it a mixture of MySpace and iTunes. I looked into it, and at first glance it looked like an interesting new wrinkle on online distribution. Essentially, any music fan can become an online music store, selling tracks from artists he or she likes. The stores are fairly easy to set up--it's basically a Web module that can be placed on any home page. The resellers get some cut--money or other forms of reward--for each song they sell. Artists, meanwhile, can sell their music through hundreds or thousands of online stores simultaneously.
Then I did a little more digging, and began to see some pretty skeptical blog postings about the company. Apparently, while it's possible to set up a BurnLounge store for free, there are also higher-level stores that require up-front fees. (I haven't found a price list on the BurnLounge Web site, but I've seen blogs reporting that the fees range from about $30 to more than $400.) More important, once you've signed up to become one of these higher-level affiliates, you earn money by convincing other people to become affiliates.
Aha! A multi-level marketing program. That explains why my fellow musician had first heard of BurnLounge from a random guy in a mall.
Now, there's nothing illegal about MLM in itself, but years of watching the music industry (not to mention surviving the Web 1.0 bubble) have trained me to be suspicious of up-front costs and uncertain business models. I shared my suspicion, pointed the inquirer to some of those blog postings, and decided that I'd continue to promote any of my own musical projects through other channels.
Yesterday, according to a news report, the U.S. Federal Trade Commission filed a lawsuit in California accusing BurnLounge of being an illegal pyramid scheme.
Now, an accusation doesn't make it a fact. Nonetheless, I'm more than happy to stick with time-tested sales and promotional channels like CD Baby and MySpace.
All a good reminder to beginning musicians: there's no short cut to success--not even the power of the Web can substitute for the time-tested combination of talent, hard work, and luck.
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff. 
And how can something be a MLM when they're selling a product? I am one of those VIP Mogul Store owners paying over $400 a year. I'm paying for the software that's given to me to run my store and manage my business. Incredible software by the way...and yes, I do earn money from people who sign up for stores under me. That's because I'm selling them their own store...so I earn a little commission off of that sell.
Just wanted to tell you that you need to get all of your facts straight before going and posting negative blogs about something.
Blessings,
Anita
And how can something be a MLM when they're selling a product? I am one of those VIP Mogul Store owners paying over $400 a year. I'm paying for the software that's given to me to run my store and manage my business. Incredible software by the way...and yes, I do earn money from people who sign up for stores under me. That's because I'm selling them their own store...so I earn a little commission off of that sell.
Just wanted to tell you that you need to get all of your facts straight before going and posting negative blogs about something.
Blessings,
Anita
Everything he says above about what Burnlounge is about is true (except for the MLM part). It's quite amazing...and a wonderful business. It's also a way to promote the music you love.
It's actually very similar to Mary Kay. It's based on that kind of business model where you earn money from the people who signed up under you. Would you consider Mary Kay a MLM???? No way...
Everything he says above about what Burnlounge is about is true (except for the MLM part). It's quite amazing...and a wonderful business. It's also a way to promote the music you love.
It's actually very similar to Mary Kay. It's based on that kind of business model where you earn money from the people who signed up under you. Would you consider Mary Kay a MLM???? No way...
90% of the companies revenues are from signing up other members who will never make a dime and will lose money unless they sign up other members!! The profit is only $.05 cents from each song and the downloads don't even work on ipods which itunes owns 80% of the market.
There is no way you can profit from selling music with a burnlounge store specially if you spend any money to market your store. BurnLounge members have 100,000 other members they are competeing with for the other 20% of the market which Yahoo Music, Napster, Rhapsody and others are also competing for.
If it was so easy to make money from selling music why wouldn't Burnlounge just give its software to everyone free? How come their competitors don't charge to promote their music? You can sign up for Itunes, PassAlong, Napster, and Yahoo Music and other music stores affiliate programs and make money from sales your friends or family make!!
The answer is because they would not be able to support the business model, members wouldn't make money and the founders would not get their fat pay checks. The onine music business is not easy!! Sony, a billion dollar company just annouce that it is closing its digital music store!! If they can't sell music online how is the average person going to succeed?
I think anyone that is making money from BurnLounge better starting looking for new employment because tomorrow is judgement day!!!
T.M.D
90% of the companies revenues are from signing up other members who will never make a dime and will lose money unless they sign up other members!! The profit is only $.05 cents from each song and the downloads don't even work on ipods which itunes owns 80% of the market.
There is no way you can profit from selling music with a burnlounge store specially if you spend any money to market your store. BurnLounge members have 100,000 other members they are competeing with for the other 20% of the market which Yahoo Music, Napster, Rhapsody and others are also competing for.
If it was so easy to make money from selling music why wouldn't Burnlounge just give its software to everyone free? How come their competitors don't charge to promote their music? You can sign up for Itunes, PassAlong, Napster, and Yahoo Music and other music stores affiliate programs and make money from sales your friends or family make!!
The answer is because they would not be able to support the business model, members wouldn't make money and the founders would not get their fat pay checks. The onine music business is not easy!! Sony, a billion dollar company just annouce that it is closing its digital music store!! If they can't sell music online how is the average person going to succeed?
I think anyone that is making money from BurnLounge better starting looking for new employment because tomorrow is judgement day!!!
T.M.D
And yes, I would consider Mary Kay a MLM. See the Wikipedia definition here:
http://en.wikipedia.org/wiki/Multilevel_marketing
As I said in my post, there's nothing wrong or illegal about MLM's per se.
And yes, I would consider Mary Kay a MLM. See the Wikipedia definition here:
http://en.wikipedia.org/wiki/Multilevel_marketing
As I said in my post, there's nothing wrong or illegal about MLM's per se.
decide whether to shut down Burnlounge or not....I'm following this because I
am associated with musicians that have participated and joined? If it is real, I'd
like to say it's real. If it is not, I'd like to say that too...
decide whether to shut down Burnlounge or not....I'm following this because I
am associated with musicians that have participated and joined? If it is real, I'd
like to say it's real. If it is not, I'd like to say that too...
Model and it has helped me gain some new fans, and has enabled me to expand onto more of a national level. Granted, I don?t try to make money by signing up others ,but I?ve been able to sell my tracks to a broad range of people and to me that?s what it?s all about.
Model and it has helped me gain some new fans, and has enabled me to expand onto more of a national level. Granted, I don?t try to make money by signing up others ,but I?ve been able to sell my tracks to a broad range of people and to me that?s what it?s all about.
- Conspiracy theory
- by larainne June 22, 2007 2:23 AM PDT
- Al Gore , Board of Directors Itune -> friends from FTC-> Burnlounge, threat to Itunes?
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