Blog Post

Justin Timberlake Hearts BurnLounge

New York City-based BurnLounge is a company to keep an eye on. The company has raised $13 million from entertainment industry investors including Justin Timberlake. It turns music fans into promoters and sellers by charging for access to its catalog of music and web storefront tools.

The idea is to “take the street team into the twenty-first century,” says Stephen Murray, BurnLounge co-founder, president of entertainment, and chief creative officer. The three-and-a-half-year-old company launched in June after being in beta for eight months.

It generated $1 million in sales in its first month. Fans now operate 40,000 50,000 online retail shops, and the company claims it’s the fifth-largest music download site.

Murray admits that music generates very low margins — sellers earn 5 cents per song sold or 50 cents per album. The company gives doles out more money for selling BurnLounge stores (and soon merchandise), with an affiliate system set up that requires prospective store operators to sign up through a current store operator. Skeptics compare it to a pyramid scheme.

BurnLounge’s setup fees aren’t negligible; $29.95 per year for the basic store, and up to $429.95 per year plus $8 per month if you want VIP concert passes and such. Other complaints: the site makes frustrating use of Flash and only works properly in Windows. Downloads are WMA files, meaning they won’t play on iPods.

Playing to people’s cool kid aspirations on a slightly janky site? That sounds familiar. Party promotions also helped drive MySpace to the top…maybe BurnLounge will catch the eye of one of the hungry media moguls. BurnLounge may not be a social network, but that doesn’t seem to be terribly profitable anyways. MySpace itself just entered the customizable online music franchise business over the weekend.

The company is facing competition from startups and other large players Other companies that help fans to set up music shops include MySpace partner Snocap, Navio, and Musicane. BurnLounge claims that it is not taking customers from iTunes, or even P2P networks.

The company says the vast majority of its retailers and customers have never previously downloaded a single song from the internet. And these new buyers seem to be more partial toward full albums than those of the a la carte generation, with 80 percent of transactions involving at least one album. That’ll make the musicians happy.

And unlike the new MySpace music shops, this is not an indie play. Though BurnLounge adds 350 albums per week of unsigned music, according to Murray, its biggest sellers are far and away pop albums from the major labels.

(Surprisingly, “SexyBack” was nowhere to be found…did Justin give the exclusive to iTunes?) Occasionally heavy promotion brings a smaller artist to the top, for instance Coffey, a poppy Texan singer who likes to pose with the confederate flag.

Update: BurnLounge says its number of registered retailers is 40,000, not 50,000 as it had previously indicated.

27 Responses to “Justin Timberlake Hearts BurnLounge”

  1. Okay this is good. Why is it, that the only people willing to write both first and last name to their comments, are involved with Burnlounge and successful. I would have to say it’s probably because when we take off with this, to the levels these other people can’t even begin to invision, then they won’t have to look like such fools, for adding their two cents.

  2. I think the biggest problem is that the hardcore music heads that would normally drive this type of business have I-pods. If this were capatable with the I-pod I think it would have a future. Untill then I don’t think it will work. Not to mention their sites are garbage.

  3. BL…NOT for everyone. I have three children and they all love downloading music, their friends love downloading music. For less than a $450 investment I now pay my houspayment EVERY month from BL. Will I forever, I don’t know. I know that music WILL be around forever and that is what my husband and I are banking on. I know that my kids are having a blast with our website. I was paying netflix and itunes every month anyway and not making anything. Now I pay myself for music and will be paying myself for movies and other products next year. Bottom line…if the shoe fits, wear it. This works for this family. It seems like their are people who are trying to give this company bad PR…you have to ask WHY? If you are interested, do research. When something comes up that’s new and good, I mean really really good, something that is threatening to other companies or empires, their will always be those who are sent to TRY to tear it down. BL is not for everyone, BL is great for my family.

  4. Anyone who says that this is a “pyramid scheme” simply does not know what the MLM industry is all about. Pyramid schemes do not have a product. This does. What I see here, I’ve seen over and over again at site after site – the people who are dogging it the most obviously know the least about the MLM industry and do not understand the basic principles of how MLM programs are able to pay out their commissions. This is poised for huge growth. For those of you who are critical of this program, at least take the time to learn how it works before you open your mouthes.

  5. To Whom it may concern;
    Anyone who doubts it a pyramid scheme business model only has to read the above loooong post and substitute “Amway” for BurnLounge and “soap” for digital media. Oh boy, its fun to live in America…………………

    Yes! It is a pyramid but not a scheme. It is also concentric, revolutionary, and different! So sue us. When we are rich and you still work for the man. You can make all the excuses you want and blame it all on me if it helps.

    America is built on the entrepreneur. If it wasn’t for them, you wouldn’t have a job today. They had to endure all this trash too! People telling them it will not work or it is just a way for them to make money.

    If you enjoy the nine to five routine and accept others deciding what you are worth and having them reap the majority of the rewards for all your hard work and then, on the fly deciding that you are no longer needed just to keep from having to pay you a retirement. Then I can see why you want to stay away from new ideas like Burnlounge.

    While you are at it, go and research the cost of another franchise and remember that is just for the store name and not for the structure, product or workers. Burnlounge is a way for the average American to get a slice of the American Dream. It is not a guarantee, just the chance.

    I hear about people putting money into the lottery, Las Vegas, and several other things that are much less certain than this. And no one says a word about them being a scheme. It is all perfectly accepted by today’s standards. You are more likely to get struck by lightning seven times in a row, than you are to win the lottery! And still people enter it. Some win and many more lose! But it is still there and someone is still making a lot of money from it.

    I have a team in Burnlounge. They are people just like you. Some of them are motivated and hard working and they get this as being a chance for them to make it. They are telling others every day about the business. Not because they expect to make that much money now. Many people invest in stocks for what they call the long term.

    This is no different; at one time Microsoft was penny stock, as was Goggle and many others. If you keep with it and do your part, keeping in mind that this is still a startup company and has the potential to grow into a very profitable industry in the future, you will make it too. Several things that will make this company more profitable are still being implemented.

    So now is a kind of extra time for you to get your team started, trained and prepared for the day when the sign is turned around on the door that says “OPEN FOR BUSINESS” in 100 countries and selling everything the Music and Entertainment Industry has to offer.

    If you don’t want to get in now, that is fine. No one is telling you differently. But don’t cast your stones at the others just because they are willing to try.

    Mark

  6. Remember the 70/30 rule.

    70% product and 30% recruitment. If 70% of your profit is from selling the product, you’re in the clear. If not, the FTC will hunt down the company and its leaders will be forced to pay a hefty fine, change the name of the company, change locations, and find another innovative “product” to cover up their new pyramid scheme.

    If the product that BurnLounge is trying to sell doesn’t materialize in the next couple years, then BurnLounge will go bye-bye.

  7. to my knowledge the burnlounge pay concept is based off a reward point system. stating that twenty dollars can earn you three hundred reward points and if the points match up on both sides then up can recieve a fifty dollar check. On the other hand if you only have points on one side then you dont quality for the check. remember that you earn points from your team even if you dont sale making able to earn monies still because if you now spend twenty to equal three hundred of the accumalated points then thats a check. So if you dont earn dirct money you get points to recieve monies at any given time. Im looking at it this way. I can spend twenty and earn fifty doubling my money by more than half. Im not a burnlounge mogul but i am very interested in this independent music retail business. I want to understand this business more because i see a bigger picture in how big this thing can be. So,its a gamble, but all ideals and business ventures are gambles. If this is not true on how i explained the pay out out then someone please email me and let me know really, because this DO SOUND REALLY GOOD! It was also explained to me that there is a one time fee to start based on what package you want. Then there is a monthly fee of 29.95 to keep your web site running. the package cost includes the tools needed to run your sit and manage at any given time to stay current with whats HOT in entertainment.Please! someone tell me whats really going on. http://[email protected] please give me more insight because i really do want to make alot of money and work for MYSELF.

  8. My only concern is how long this will last. Reason being, I was initially very excited about BurnLounge (untill my girl told me to sit down and think about it) I already have achieved a level of success in network marketing. The problem is, even though its a “sexy product” with celebrity endorsements, where is the residual income? What if this becomes just “another commodity” like how telecom mlm’s are becoming. I’ve studied the soft binary structure and if we are only purchasing 20 songs a month (assuming it pays doller for doller 1 volume point per song) that means at a minimum I would need to have at least 2-3 thousand reps EACH SIDE (4-6 thousand)automatically purchasing each month to generate a $4,000 check. Most good companies mean you need only around 350-1000 reps (2000 for a soft binary) to make 10,000 a month. This means that most of the money will come from rep production (not unlike Amway with its low payout comp plan but high hype ACN with its use of extremly low residuals but high hype) If any reps out there who are experienced in network marketing want to enlighten me please be my guest. I’d actually like to be proven wrong.

  9. SMART BUSINESSMEN AND WOMEN WILL JOIN BURNLOUNGE BECUASE OF THE CONCEPT AND CONCENTRIC PAY PLAN. MANY INDEPENDENT ARTISTS WILL JOIN BECAUSE BURNLOUNGE SUPPORTS INDEPENDENT & UNSIGNED ARTISTS. LEARN THE MUSIC BUSINESS FOR YOURSELF, KNOW THE LEGALALITIES OF THE MUSIC BUSINESS AND IF YOU ARE A “SERIOUS” ARTISTS OR PASSIONATE MUSIC LOVER, YOU’LL SEE THE BIGGER PICTURE!! IF SOMEONW INVITES YOU TO TAKE A LOOK AT BURNLOUNGE, DELVE DEEP INTO IT AND DO YOUR OWN RESEARCH BECAUSE “HOW MUCH” THIS AND THAT, HOW MUCH YOU MADE?? DOESN’T MEAN NOTHING, ITS AN INVESTMENT FOR YOUR COMPANY, INDIE RECORD LABEL, CHARITY, CHURCH, KIDS,FAMILY,SCHOOL… WHAT EVER YOU WANT IT TO BE. I’VE MADE $1,900 EVERY WEEK AND THE DOWNLINE KEEPS GROWING, MY MUSIC, YOUR MUSIC, JAY-Z MUSIC, ELVIS MUSIC, ANY GENRE…FANS PURCHASE WHAT THEY LIKE, YOU ARE NOT FORCED AND YOU AS A RETAILOR IS NOT LIMITED…

    LEARN THE BUSINESS BEFORE YOU LASH OUT AND DISCREDIT ANYTHING*

    http://www.burnlounge.com/BAX

    DISCOVER & DOWNLOAD

  10. Stop hating. I’ve made $2,000,000 from BL in my first 2 weeks. My downline is already 1/3 the size of the Chinese population and they should overtake iTunes within the next couple of weeks. The next Bill Gates is likely to be a BL participant and I’ve even heard rumors that countries in Africa are going to be taken out of poverty because they are signing up for BL. This is a new economy where you have control!!Three guys in Ghana who signed up for BL a few months ago now account for 1/2 of the country’s GDP! Just look at all the celebrities involved. Pretty soon everybody with a name will be selling! I’ve even heard that Osama bin Laden has set up a BL account to fund his operations! If that isn’t validation I don’t know what is. So you’d better sign up or get left in the dust. Don’t be the 7th billion person to sign up because then your downline is limited to other planets and you have to buy the $7,000 Mars Mogul package to sell to Martians.

  11. Every single pro-Burnlounge argument raised here has been answered in the following forum, so I won’t try to reinvent the wheel. Anyone who is genuinely interested in the facts, rather than the hype, will want to check this out:

    http://burnlounge.proboards92.com/index.cgi

    Anyway, just to answer a few of Scott’s arguments briefly:

    [I]… the negativity from people that just don’t have the ability to be successful is amazing.[/I]

    This is a typical slash-and-burn Burnlounge tactic – avoid the issues by painting critics as failures: “If you don’t like BL, it’s because you can’t be successful at anything.” No substance to the argument, just ad hominem, assumptions, and appeals to ego.

    [I]The fact of the matter is that the Direct sales industry has proven time and time again to be a multi billion dollar industry … I am sure the 1000 people that are EMPLOYED in the Mary Kaye building in Dallas really care what you, the skeptic beleive, when they receive their check every week from the multi billion dollar company. I am also sure the same is true for the employees at Herballife, Prepaid Legal, Amway, and Pampered Chef[/I]

    Let’s be honest here and admit that not all “direct sales” companies are classic MLMs that make most of their money by signing up sellers and charging them fees, which is how Burnlounge and Burnlounge retailers make [I]almost all of their money.[/I] Most of the companies you list actually sell [I]product,[/I] and a lot of various kinds of it. I have bought things from Pampered Chef and Shaklee and a number of other direct sales companies without ever being hawked a membership or pressured to shell out a bunch of money and start my own version of their business. (Your naming of Amway, however, as an example of the legitimacy of the MLM approach is an indication of your own ignorance. The documentation of the ethical skeletons in Amway’s closet is extensive, and the success rate of its retailers is very low.)

    [I]I am also sure the same is true for the employees at Herballife, Prepaid Legal, Amway, and Pampered Chef, again, all multi billion dollar companies that have produced thousand upon thousands of millionaires.[/I]

    Thousands upon thousands of millionaires? You’re not exaggerating just a tiny bit? Either way, the issue is not that money has been made, it is [I]how[/I] that money has been made. Much of the “profit” in MLMs (and almost all of the profit in some) is from signing people up below you, not selling product.

    [I]Oh yeah, Pampered Chef is Warren Buffets company, and I am sure the already loaded billionaire decided to start an illegal PYRAMID SHEME. LOL[/I]

    In the first place, you should get your facts straight – Warren Buffett did not start Pampered Chef, Doris Christopher did. Buffett only recently bought it. But more importantly, as I stated before, Pampered Chef makes its money selling [I]product,[/I] not by pushing people to spend a bunch of money buying memberships and $300 “training DVDs” and to tell everyone else to open their wallet and “get in.” It also doesn’t make its money by charging people to buy in based on promised products and services that have [I]yet to materialize.[/I] It is not a good example to use to defend Burnlounge; rather, Pampered Chef’s success is an indictment of many Burnlounge business practices.

    [I]Burnlouge is so sure of what they have created, the founders took the company and the business plan as it stands now to the Attorney General of the state of each market they are currently in, and got the seal of approval. The validation from this is huge.[/I]

    They did this because they were legally required to do it, and also because they knew they were skirting so close to the definition of a pyramid that they couldn’t get financial backing without making sure they could at least meet the legal technical anti-pyramid requirements [I]somehow[/I]. And if you were at the Las Vegas launch event, as I was, you would have seen (if you were paying attention) that many of the recent changes in BL’s terminology and rules were geared toward [I]technically[/I] following the letter of the law, or at least [I]appearing[/I] to do so. The BL execs know quite well that only a small fraction of their profits come from actual music sales, in direct violation of the FTC 70% rule, so now they try to make it look as if their stores, University training DVDs, etc., are actually “product,” ergo, you’re not supposed to talk about “recruiting” anymore.

    [I]Now, for all the people above that think it is going to be impossible to recoupe the Burnlounge investment. I personally got involved with Burnlounge 27 days ago and have recouped my investment 10 fold(checks in hand). Each of the 10 people that i have personally got involved in the same 27 days has also more than recouped there investment, and that is just on the networking side of the business.[/I]

    For the ten thousandth time, you prove the BL critics’ point. You admit right here that you and ALL the people you have personally gotten involved have [B]only made money signing other people up, NOT by selling product.[/B] THAT is the whole problem I and many others have with Burnlounge.

    [I]Right now my limited efforts to put 10 people into the business has already turned into a network of over 100 Burnlounges that I earn a piece of the profit from[/I]

    Or more precisely, as you have just admitted, you get a cut of their fees.

    [I]The guy (my best friend) that got me involved, has over 2500 stores that he earns a piece of.[/I]

    Not likely. You only earn commissions from a max of six levels below you, which totals 252 stores in a properly structured full A-B tier (according to BL’s own methods). Even with the “concentric retailing” approach, which is simply a way of having more than one A-B pyramid, that would mean your friend must have ten full A-B tiers set up. But many people don’t make money of all the stores below them (at least fee commissions), because the A-B tiers must be evenly distributed before those commissions are paid.

    I keep hearing these wild claims about people “making money off thousands of stores” or “making $17,000 a week,” etc., but many of these claims are obviously lies; they are pasted verbatim by different people into discussion boards and BL promo emails. Another unethical aspect of the business.

    [I]If the average person that owns a Burnlounge just buys their own personal digital content monthly from their own Burnlounge (example: music, movie rentals, ebooks, ringers, concert tickets, video games and all the other content soon to be available at the launch of BL 2.0 in January), i will make an average of at least $3-$5 per week per Burnlounge in my network.[/I]

    Two questions: 1) What legitimate business expects me, as its retailer, to make it sustainable by buying products from myself? I thought I was supposed to make my money selling things to other people; and, 2) Why should I buy a bunch of things from myself just so [I]you[/I] can “make an average of at least $3-$5 per week per Burnlounge in your network”? (Especially since your math isn’t even right – the 20 song sale minimum per month required for BL retailers to even get their commissions at all totals up at $1.00 a month off your first retailer ring; 40 cents per month off your second ring; and an as-yet-to-be-determined-or-disclosed lesser amount per month off your third through sixth rings – unless, of course, the company decides per its own rules that your commissions have surpassed “an acceptable level” and they just refuse to pay you.)

    [I]Hmmm, when i have 10,000 Burnlounges in my network in 6 months, that’s $—– a week. You do the math genius.[/I]

    No, [I]you[/I] do the math, genius. As I have already shown, the chances of you having 10,000 stores below you (40 full A-B tiers) are almost nothing, and if you’re selling that same possibility to all those people below you, you are committing fraud. And even if you ever did get to sign those people up, and make your cut from their fees, they will soon start dropping like flies when they find that they must keep buying things from themselves just to meet their minimum and be eligible for commissions, and they must do [I]that[/I] because there are so many stores that they won’t have anyone else to sell to, because everyone else, [I]by the company’s own design,[/I] is also a Burnlounge retailer –

    And speaking of doing the math, this is precisely what no Burnlounge defender has ever done, anywhere, even to this day. I and others have asked, over and over again, “Show me the numbers.” No one ever does, and no one ever will. All we ever get is the same hypothetical dream-talk you’re offering here.

    [I]This is not about owning 1 Burnlounge and trying to sell 500 songs a month to your family and friends. This is about building a distribution network for yourself just like Starbuck’s and Papa John’s Pizza have done. Papa John didn’t say how much money can I make buy opening a pizza joint a selling $10 pizzas, he said how much money can i make buy selling 2000, quarter million dollar pizza franchises and then each of those franchises will sell 500 ($10)pizzas a week. I will get a piece of 100,000 pizzas sold every week.[/I]

    Which is further proof that you don’t know business like you claim to. Papa John’s and Starbucks and all other legitimate businesses have limited distribution channels designed to protect the retailers from oversaturation of their market. Unlike Burnlounge, where all 40,000 “corner stores” are on the same corner (my computer on my desk), there is no place in the world where there are 100 Papa John’s or 100 Starbucks in the same neighborhood, all of them peddling more stores to their very neighbors who walk into theirs. And there never will be.

    [I]To be honest, this is not for the average person to get involved with, which is probaly the people who posted most of the negative comments above. I am personally a very successful business person, which is also true for almost every person that I have seen get involved so far.[/I]

    Well, you and I must belong to different Burnlounges, because my experience has been exactly the opposite.

    [I]This model has been designed for the business minded person to succeed in.[/I]

    No, it has been designed for the few people who have no qualms about people below them in the pyramid losing money to succeed in, and for people who have little or no real business understanding to be roped in by the tens of thousands to support the company by their membership and DVD training fees. If you’re good at selling memberships and “selling the dream,” then yes, you can make money. But you won’t be making money selling music, as you have already demonstrated and admitted.

    [I]Burnloung does not prey on the poor guy that the typical MLM does with the promoise of making an extra couple hundred bucks a week. [/I]

    No, they prey on the poor guy with the promise of making millions, just like you’re doing here.

    [I]There isn’t a person on my team that won’t be making a HEALTHY income through Burnlounge within the next six months.[/I]

    Right – by selling memberships and getting those people to sell more memberships. Not by doing what the company claims to be doing, which is selling music.

    [I]I can’t wait to see what the next person has to say about this post. Even more interested to see who is smart enough to look into this with no previous involvement and put a positive post up.[/I]

    Again, more appeal to emotion and ego rather than any substance – “If you’re smart, you’ll put up a positive post.” Stick to the facts, please.

    I wanted Burnlounge to be all it claimed to be. I joined because I’m all for wresting control of music from the big labels, and I thought it was great for artists. But even that luster is wearing off, as BL refuses to advance the cross-platform integration that they have promised, and their (my) cookie-cutter user interface is still lousy, and really no good at all for promoting anyone in particular (or any other product, if and when that ever materializes). (And contrary to the hype, just because the world is going digital does not in itself prove that Burnlounge is going to be the big winner in all this.) I was also led to believe that it was something other than a classic MLM with its recruitment- and fee-heavy profit structure, and I don’t appreciate being lied to like that.

    For an excellent treatment of the business and ethical problems with MLMs in general, I recommend the following article, “What’s Wrong With Multi-Level Marketing?” Be sure to read all the FAQs, as they deal with many of the responses to the article that its author has already received:

    http://www.vandruff.com/mlm.html

  12. WOW, the negativity from people that just don’t have the ability to be successful is amazing. Or is it that you or someone you know got involved with a MLM previously and already failed?

    The fact of the matter is that the Direct sales industry has proven time and time again to be a multi billion dollar industry, and noone can deny that the digital download market is soon to be one of the largest industries in the world. Put the 2 together, and what do you have, a genius concept. I am sure the 1000 people that are EMPLOYED in the Mary Kaye building in Dallas really care what you, the skeptic beleive, when they receive their check every week from the multi billion dollar company. I am also sure the same is true for the employees at Herballife, Prepaid Legal, Amway, and Pampered Chef, again, all multi billion dollar companies that have produced thousand upon thousands of millionaires. Oh yeah, Pampered Chef is Warren Buffets company, and I am sure the already loaded billionaire decided to start an illegal PYRAMID SHEME. LOL

    Burnlouge is so sure of what they have created, the founders took the company and the business plan as it stands now to the Attorney General of the state of each market they are currently in, and got the seal of approval. The validation from this is huge.

    Now, for all the people above that think it is going to be impossible to recoupe the Burnlounge investment. I personally got involved with Burnlounge 27 days ago and have recouped my investment 10 fold(checks in hand). Each of the 10 people that i have personally got involved in the same 27 days has also more than recouped there investment, and that is just on the networking side of the business.

    Right now my limited efforts to put 10 people into the business has already turned into a network of over 100 Burnlounges that I earn a piece of the profit from, and that is just the beginning. The guy (my best friend) that got me involved, has over 2500 stores that he earns a piece of. If the average person that owns a Burnlounge just buys their own personal digital content monthly from their own Burnlounge (example: music, movie rentals, ebooks, ringers, concert tickets, video games and all the other content soon to be available at the launch of BL 2.0 in January), i will make an average of at least $3-$5 per week per Burnlounge in my network.

    Hmmm, when i have 10,000 Burnlounges in my network in 6 months, that’s $—– a week. You do the math genius. This is not about owning 1 Burnlounge and trying to sell 500 songs a month to your family and friends. This is about building a distribution network for yourself just like Starbuck’s and Papa John’s Pizza have done.

    Papa John didn’t say how much money can I make buy opening a pizza joint a selling $10 pizzas, he said how much money can i make buy selling 2000, quarter million dollar pizza franchises and then each of those franchises will sell 500 ($10)pizzas a week. I will get a piece of 100,000 pizzas sold every week.

    That’s what burnlounge offers to each person that wants to get involved.

    To be honest, this is not for the average person to get involved with, which is probaly the people who posted most of the negative comments above. I am personally a very successful business person, which is also true for almost every person that I have seen get involved so far. This model has been designed for the business minded person to succeed in. Burnloung does not prey on the poor guy that the typical MLM does with the promoise of making an extra couple hundred bucks a week. There isn’t a person on my team that won’t be making a HEALTHY income through Burnlounge within the next six months.

    One last note for all you skeptics:

    Take a step back and look at what you are doing for a living right now. You probably work for someone else. Well that person is the person that makes the majority of the money from all the efforts that you and the people around you put in every day. Seems like you are the one who got scammed, not us.

    Besides what kind of genius wouldn’t invest a measily $430 dollars into their own efforts for ANY chance that it could become a million, that’s just common sense.

    I can’t wait to see what the next person has to say about this post. Even more interested to see who is smart enough to look into this with no previous involvement and put a positive post up.

  13. It would be fascinating to see whether there’s a correlation between Scientologists and BurnLoungists. If you sell 14,000 copies of the new K-Fed CD do you get to realize the secret of the creation of L. Ron Hubbard’s universe?

    BurnLounge will make more money in monthly and annual storefront fees from the hopelessly desperate hordes than they ever will from selling digital tracks.

    How do I know that? It’s simple. They charge you monthly fees for your storefront. In any normal marketing organization, the tools which allow you to maintain your storefront are a cost of doing business known as AFFILIATE MARKETING costs or CUSTOMER ACQUISITION costs.

    As a marketer you’re quite willing to pay them, so long as they’re lower than or in-line with other marketing methods such as email campaigns or TV commercials. And I can guarantee you that the cost of developing and maintaining the tools that allow all these shmoes to pretend they’re the iTunes music store is MUCH lower than other forms of marketing.

    In effect, though, your monthly fees are going not to support those tools, but instead to fund the Multi-Level-Marketing machine that books hotels and conference rooms and lures hapless victims inside for seminars, promotions, etc. none of which have anything at all to do with selling music. Ultimately those will slow down, and you’ll be lining the pockets of the founders with your monthly fee.

    In this way, BurnLounge never has to sell a single track to be successful. It’s a ballsy approach that frankly displaces all of the business risk out to the morons they’re able to convince to do all of their marketing for them.

    If they were truly sincere in creating “street teams” and empowering consumers to fuel the music market, they’d allow any old band to sell their music from within the site and they’d let folks set up storefronts for free, since that is what it costs them.

    Based on the fact that the people are the most stupid and lazy are often those who think they’re all going to get rich doing nothing, and the fact that this business displaces nearly all of its marketing costs out to its affiliates, these guys will probably be successful to some degree.

    Too bad.

  14. Been in mlm’s for a while, have a decent one now called Tachyon Energy products. Have an interest in selling my music and other friends music we are involved with. So here’s a different take. What’s not a pyramind scheme in selling. A farmer grows a tree, a lumber mill buys it and changes it, a distributor sells it to a lumber co, who sell it to a contractor, which is then bought by a homeowner, and at each point along the way each party gets a margin. And usually a smaller and smaller margin at that. The only bad thing, in the real world is, there are taxes at all these levels over and over. Here there’s only the final sales tax if that. So maybe it’s not such a ‘sneaky’ top heavy idea of how to market media. There’s lot of places to put your tracks allready and you can set up you own website and try to generate traffic, so it’s a trade off between obsurity and paying the price for being connected?

  15. Skeptical

    This will be a viable business model for a while. $1 million in sales the first month is a good start. The problem is that it is a pyramid scheme, and with any pyramid scheme, it’s the people at the top that make all the money. The average schmuck that pays $29.95/year (or more) to participate isn’t going to make a profit. Burn Lounge doesn’t care. They’re profiting on the annual fee and whatever music the user actually sells is incremental.

    So Burn Lounge is tapping into the pyramid model to sell music by recruiting a sales force of people who don’t realize that the economics are against them. Great. Nothing to see here. Best of luck getting them to renew after they make a whopping $1.50 their first year (although I’m sure they’re clever enough auto-renew the billing).

    I’m personally not going to buy music from Burn Lounge via Cadillac’s website and WMA format is unappealing. I’ll stick with iTunes and from the business side, think MySpace has a much more powerful platform that’s being launched.

    And by the way, celebrity and media mogul investors don’t assure success. Doing celebrity deals is easy with the right connections (and some cash).

    Any by the way, it’s clear from the writing styles that DAVE is David York of Burn Lounge who posted earlier.

  16. i must say, people need to start thinking outside the box! i have been involved in burnlounge for a short while and its been exciting and fun. Where else can you get into the music business for such a small initial investment, have the rights to sell millions of songs (soon to be movies!!) and get paid EVERY WEEK!! there is a reason why all the celebrities and wealthy businessmen are jumping in burnlounge, they see it!! Its a no-brainer! i have had NO PROBLEM getting my friends, family and co-workers involved. We are all thankful that there is finally a way to get paid for recommending a new albumn to a friend!

  17. Anyone who doubts it a pyramid scheme business model only has to read the above loooong post and substitute “Amway” for BurnLounge and “soap” for digital media. Oh boy, its fun to live in America ;)

    These people who get involved in these schemes drink the coolaid that you dont have to sell the product, you sell the business to your friends. But someone has to want to buy the end product (songs/albums) to make it all float. That tends to work with soap and other staple products. Will it work for WMA files … I doubt it. So at the end of the day the people holding the BurnLounge shops are just shuffling money between those who have fewer friends and those who spend all their time evangelizing new store owners. Guess who loses?

  18. It’s so strange to see the comments posted here and on other blogs regarding BurnLounge. I’ve come to realize that most people who post either have misinformation or just dont “get it.”

    It’s also very interesting that people who are already succesful and have a head for business understand this concept immediately and average hard-working people (including myself) are quick to scream “pyramid scheme” or “that won’t work.”

    For instance, the person above who’s worried about selling 299 songs to break even every month doesn’t see the big picture. This is not about opening an online store and having to hussle up thousands of customers. You only need a few customers. Your best friend, your workout partner, your mom. And while that’s not many sales in your store each month – you have to remember you’re making money out of hundereds to thousands of stores. That would be like McDonalds opening just one store in your neighborhood. Their customer base would not extend past a 2 mile radius. But they blanket the globe with golden arches and instead of selling the least hamburgers – they sell the most. Likewise, BurnLounge will sell the most music, then movies, ringtones, audible books, and any other form of digital media.

    Let’s face it guys… the world is aggressively transitioning to digital. The market is only 8% of where it’s going. The 92% who are not downloading will be very soon. This is not a theory – its a fact. The convergence from a tangible hard unit to digital would happen whether BurnLounge exists or not. Fortunately it does! Literally hundreds of billions of dollars are up for grabs that are moving from traditional retail to online stores. So with this knowledge, you can choose to be just a consumer – or you can build loyal distribution across the globe by opening your mouth and saying “check out my burnlounge buddy!”

    There are 300 different download services online. 299 only let you be a customer. Only 1 has a business model that let’s you profit. That’s appealing to the masses. Burnlounge is going to blow up and those that position themselves NOW in front of this huge cultural shift will create unimaginable wealth.

    You see, iTunes can spend 3 million on a superbowl commercial and even knock on my best friend’s door and personally solicit his business. But if my friend can buy his music from me rather than from iTunes he will do that because he’s loyal to me and I’m loyal to BurnLounge. Again, extrapolate that concept univerally among millions of stores and you have secure revenue that comes in whether you work that day or not. It’s truly passive residual income.

    America is country number one out of 100 countries guys. The company that is funding this 100 nation roll out is Montgomery & Co. They are the firm that brokered the sale of myspace.com to Fox Network for $580 million recently. Do you realize the amount of due dilligence that this broker firm did before taking on BurnLounge?? Do you think Livenation, who is responsible for over 80% of all concert venues in America, would partner with BurnLounge, granting their retailers VIP access to all events? Why would they do this. Because the UNDERSTAND the concept. They understand the amount of music BurnLounge is already moving with just 40,000 stores (over half a million monthly) will continue to increase exponentially as we expand across the globe. Why would Cadillac, who NEVER sponsors anybody, ask to be BurnLounge’s official sponsor for life and open up their own BurnLounge (see http://www.burnrubberlounge.com)? Why would the Elvis Presley Enterprises, or Willie Nelson, or a hundered other famous artists and celebrities involve themselves with a “fly-by-night” company?

    Guys… take off your “buyer’s beware hat” for a minute and put on your “financial cap.” Stop for a minute to look at the credibility of the company. The partnerships they have put in place and what they have accomplished so far is mind-blowing. BurnLounge has done more in 9 months than most fortune 50 and 100 companies accomplish in their entire business history.

    And the really cool part is that we haven’t seen anything yet! It’s happening faster than any of us realize and BurnLounge is poised to be the biggest player in the world.

    Take the time to understand what BurnLounge offers you. Don’t sneeze at it without taking a serious look. Check out their compensation. Ask the person who shared it with you to tell you about how you’re paid to tell others about BurnLounge and how you get paid even when those folks share BurnLounge with their friends, and so on and so on and so on into 100 countries.

    Think about how virally the myspace community grew. The only question you have to ask yourself is, “do you want to be the one getting paid when music, movies, video games, etc. are being downloaded across the globe?” If the answer is yes then you need to positionn yourself NOW. Get your online media center up and running and share this with those you care about. You want to be residually-tied to as many stores as possible. Start building now before the momentum REALLY takes off, so that you’re fishing with a net instead of a pole.

    If anybody has questions or would like ACCURATE information, or would like to be sent press relases via email, etc. Feel free to contact m at your convenience. My name is David York and my email is [email protected].

    Take care everybody and God bless,

    Peace,
    David

  19. music man

    This thread shows BurnLounge’s ultimate downfall:

    If hundreds of thousands of people sign up, what “burn lounge” music store will make it big? The one that has money for advertising, time to market and promote. Not all 50,000 “record stores” will be able to make it especially with yearly and sometime monthly dues to pay which can be in excess of $400.

    And who cares what the artist makes? That isn’t my opinion, but will be the opinion of many. They just want their music.

    Another problem and more importantly, is that in order to compete with I-Tunes there has to be a competitor with the I-Pod, which there is none in sight. People will continue to use I-tunes because they have an I-pod and it is easier to use and I-pod with I-tunes than any other medium.

  20. I tried it just to prove a person wrong. I ended up right. I spent $150 to get set up and then was being charged $14.95 for the monthly store fee and a crappy magazine. At $0.05 per song I only needed to sell 299 songs to break even every month. I thought I was going to retire on this :)

    I would stay away if you want my advice. There was a consumer credit card reward program called Consumer 1st than many people detracted from into Burn Lounge. Complete pyramid scheme that is just milking money from consumers. Wait – not consumers because no one uses the site to actually download songs. IE – c’mon you are a new company and don’t use Firefox – duh!

  21. I actually was suckered into a presentation for the “next iTunes Killer” and it turned out to be Burn Lounge. The presentation delivered in a GenX like sweaty Tony Robbins fashion was a classic pyramid scheme. The focus of the presentation was on how much money you could make, complete with checks being held up like it was Publisher’s Clearninghouse. Little to no mention of any l innovation in the actual delivery of music, or user experience because of course, it is in flash and really weak.