August 16, 2005 12:44 PM PDT

Start-ups let fans sell music online

Tired of that snooty record store clerk and his out-of-print vinyl recommendations? Now's your chance to do better.

A handful of services now available or launching soon aim to turn ordinary consumers into digital-music retailers, giving people the ability to sell music from their own Web sites and make a little money in the process.

The idea draws in part from the venerable "street team" promotions in which fans--or at least people who might plausibly be fans of a band--are deputized by record labels to talk up an artist or album among their peers. The new companies hope that an online version of this word-of-mouth marketing, in which an artist's devotees can be given the power to sell songs themselves, will be even more effective.

"We've never really been able to track whether kids got in their cars, went to the store and bought that record they just heard about," said Ryan Dadd, president of BurnLounge, a start-up aiming to launch its service later in the year. "Now we're saying, let's take those loyal fans, who are really evangelical about artists, and go into business with them."

The digital services are melding traditional record industry street marketing with the long-established practice of e-commerce affiliates, most familiar from the "Buy this book" links that can be found on every author's Web site.

It's not a new idea in the digital-download sphere, either. Apple Computer's market-dominating iTunes store encourages customers to become affiliates, providing a 5 percent commission on any sales generated by customers who enter iTunes through that external link.

The newer companies are aimed more directly at turning listeners into marketers and retailers, however.

One of the start-ups, dubbed PassAlong Networks, already operates the main digital download store inside eBay, and has links to several of its stores inside the Windows Media Player.

That company encourages shoppers to "pass" links to a favorite song or playlist to other people who might like it. Anytime somebody buys a song as a result of that link, the original shopper gets points that can be redeemed for additional music in the PassAlong store.

BurnLounge's model is aimed more directly at record label fan clubs and other marketing companies that want to turn their fans into direct marketers. As currently planned, it will provide the infrastructure to let fans set up a Web site from which they can sell songs directly, handling credit card transactions and digital delivery without people needing any technical knowledge.

The company plans a basic level of service where people selling music from their site will be repaid in points that can be redeemed for more music or promotional products from a record label. If the would-be retailer signs up for a higher level of service--which will cost an extra $7 a month in fees--sales will be translated into cash, at the rate of at least 5 cents per song sold, or 50 cents per album, Dadd said.


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What's the point?
These clowns got VC money for this?
Posted by R. U. Sirius (745 comments )
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Peer Impact
Peer Impact is doing this better than anyone. They don't put DRM on Indie music, they offer free MP3s (though not enough) and give their members credit for sharing bandwidth and recommendations.
Posted by Matt Vog (3 comments )
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not nearly as good as BURNLOUNGE
i'm not into getting credit... BurnLounge pay cold hard cash to those who understand business and distribution. Contact me if you want the REAL 411 on BurnLounge. My domain name is my CNet user handle... MogulVip
Posted by mogulvip (6 comments )
Link Flag
Building the business effectively
I'm currently writing a book that discusses different types of investment theories of building a bands' music business. This story is useful to the point that music fans can be an asset to the band in more than just purchasing merchandise. My book is entitled "The Art of Developing Fans For Life" (due out in 2009) and this is an effective approach.
Posted by llp000 (1 comment )
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IE/Flash Only + Windows DRM = No Sale
I was an early affiliate of BurnLounge and requested a refund after talking with one of their upper representatives about their business plan. His arguement was that it was going to successfully keep kids honest by preventing them from sharing music files. (Admirable, but very shortsighted and impossible to claim.)

The Flash-based interface is restrictive and searching for songs/artists/albums is not intuitive or quick. The website doesn't work with non-IE browsers and all of the songs are licensed for use on a Windows DRM-enabled device. (How are they planning on winning over any iPod users?)

I don't want to be told what devices I can play music on or have it held hostage if I choose to change operating systems. For now, I would recommend avoiding the MLM-ness of Burnlounge and purchase non-DRM music through or (using the friendly application.)
Posted by GamesOverCA (1 comment )
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you don't understand business
You can continue supporting and working for Steve Jobs of APPLE iTunes. Will he pay you anything? NOPE. Personally... he does absolutely nothing for me. From a business perspective, there are several places where you can BUY music. I'm not interested in being just a customer... I WANT A PIECE OF THE ACTION... BurnLounge is the only firm that allows me to profit. Once you understand that, the lightbulb will turn on. Until then... enjoy the consumer trap that Apple, iTunes, and the iPod have suckered you into. LOL
Posted by mogulvip (6 comments )
Link Flag
Who wants the BurnLounge 411???
This is an amazing business concept. If you want in, contact me at my website. my name is Ryan Baloy. My domain name is name with the typical ending.
Posted by mogulvip (6 comments )
Reply Link Flag
Who wants the BurnLounge 411???
This is an amazing business concept. If you want in, contact me at my website. My name is Ryan Baloy. My domain name is name with the typical ending.
Posted by mogulvip (6 comments )
Reply Link Flag

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