June 25, 2007 4:00 PM PDT
BurnLounge followup
Last Thursday, BurnLounge announced that it is eliminating the "network marketing" element in which some retailers pay start-up fees to the company, then earn money by convincing new members to become paying retailers. This was the aspect of BurnLounge that drew a lot of criticism, and eventually led to a Federal Trade Commission (FTC) investigation, as I blogged about a couple weeks ago.
Instead, the company will focus on the free service, in which anybody with a Web site can become an online music retailer. Excellent move. The network marketing aspect seriously dampened my enthusiasm for what otherwise sounded like an interesting new way for artists to publicize their music.
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.
strongest position for discussion against the issue of "you can't make money on
music sales in BL" is the issue.
No one talks about distribution. Once the international expansion continues, BL
distribtution will grow. This will directly affect the residual income of each
retailer in each sales team. Case in point, read Starbuck's; revenue is strong
partly due to expanding distribution network.
This is a viable alternative to the major labels. With a connected community of
Burnlounge'rs this will be a great opportunity for many.