Trying to Capitalize on Music Download
One of the newer entrants in music download business is BurnLounge and they seem to have their supporters and also their critics. I think the adage "if it sounds too good to be true, it probably isn't..." is always good advice.
BurnLounge - Still Ripping Consumers Off?
Posted Jul 19th 2006 5:04AM by Gordon Finlayson
Last month, TheDigitalMusicWeblog exposed the growing concern in the digital music industry over the questionable practices of BurnLounge, a digital music sales service that appears to have more in common with a pyramid selling scheme than legitimate digital music stores. Since we posted that article we've seen a storm of controversy erupt in our forums as fans of the company go head to head with those who feel that BurnLounge is giving the digital music industry a bad name.
BurnLounge markets itself as a community based digital music download service which allows users to construct their own personal digital download stores to make profits from sales of music, but in reality it operates like a multi-level marketing scheme where the only real profits are derived from sign-up and subscription fees. Higher level users receive a share of revenue from any affiliates that they personally sign up to the BurnLounge, which includes both revenue derived from digital download sales through the affiliates stores and also the sign-up or subscription fees that the affiliate generates. With subscription fees ranging anywhere between $29.95 to a whopping $605.35 per year, there's plenty of money at stake.
Since downloads from the service are priced on a similar level to iTunes, and BurnLounge offers no significant additional functionality, I think that the the real business model is about sign-up fees, not about downloads, and a fair few of our readers appear to agree. Since posting this article, we've been inundated with feedback which has tended to fall into two opposing camps - the first from people who have been ripped off by BurnLounge, the second from BurnLounge zealots writing in to defend the service. The BurnLounge zealots were surprisingly uniform in their sunny responses, and occasionally sounded more like Kool Aid drinking cult members than legitimate business people, while the stories told by disaffected users are a very story altogether.
We here at the DigitalMusicWeblog think that people should give BurnLounge a wide berth - but you can make your own mind up with this sample of comments from our readers:
Burners
All info seems to support a finacial collision is on the way for all working retailers involved with Burnlounge. This, simply means people will become rich with this company. All power players will have critics and supporters. BURNLOUNGE, I applaud you and I'm a Huge supporter and will sign the dotted line today... - Jack Pope
It never ceases to amaze me how ignerance and lack of education paves the way for those who live in glass houses and there stone throwing antics. - Michelle
BurnLounge is CHANGING the entire distribution channel for music and entertainment. Before, companies held the key to distribution... now we do. Anyone can get involved. This is one of the most amazing things to hit the music and entertainment industries... - LT
..this company WILL change the way music is bought, sold, and distributed! Just wait and see in about 2 weeks when they will have over 1 million downloads. Can you say, move over iTunes? - Rose
We Will Succeed By Attracting To Ourself The Forces We Wish To Use, And The Cooperation Of Other People. We Will Eliminate Hatred, Envy, Jealousy, Selfishness, And Cynicism, By Developing Love For All Humanity, Because We Know That A Negative Attitude Toward Others Can NEVER Bring Us Success. We Will Cause Others To Believe In Us, Because We Will Believe In Them, And In Ourself. We Will Start Today. - Kris
This is a solid company with a great concept. Many people will benifit from this. Some of you obviously won't. Do any of you download music "legally"? Or are you part of the slimewire camp that thinks everything should be free. - Chris
Do not sweat the negative people in life. There will be plenty of people who have hangups about making money...ignore them. You all have entrepreneurial spirit. I applaud you. - Anonymous
I am so glad that I got in on the ground floor. Yes, I took a risk with my $500.00 but thats a risk that could make me live in comfort for the rest of life. - CAMERON
Burnlounge will allow you to copyright your own music and sign a deal so you can sell your own music from your own store. Not to mention they have some of the biggest names in the industry invested into this company. Do some research. - NM
Burned
The name is appropriate. A lot of people are going to get burned by BurnLounge. The chances that your average Joe will sell enough on BurnLounge to cover the annual fees are slim to none. - Eric Hamilton
This company is a major scam, and I wouldn't be surprised if there is an FTC crackdown on them soon enough. - Jerimi
Burnloungers always try to come up with some half-baked argument, but in reality, all they see is that they can scam others into joining Burnlounge to take a piece of the $600 up front payment. - Tony Zeoli
I have been on BurnLounge for a few months now and its alot of hype. I haven't made a dime from my record sales. - Christopher Valdez
Burnlounge is a scam. And all of you that are supporting it are slimy people. Let me just say this again - Burn Lounge is HUGE pyramid scheme.. ...I drank the koolaid. I was sucked by 2 of my friends into joining at the mogul level. And have made a total of 50 cents in return. - Buyerof SnakeOil
...its way hard to make money off of downloads at only 2 cents per download- youd have to sell over 500 songs a month just to make back your monthly fees. - BlueFishTShirts.com
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Reader Comments
(Page 1)
1. LMAO! I've been involved in a few forums speaking on BurnLounge's "business model". First of all the cultish followers of Burn Lounge never seem to directly answer questions on how they will actually make money besides signing up other members or have any idea about ecommerce conversion rates, promotion and the like.
But yet if you speak out against the model,
1. you're a "hater" because they're taking a chance instead of sitting on the sidelines
2. they point out that there are major corporations putting money into BurnLounge so it can't be a scam
It's totally amazing the baselss argumentents these people use in defense of BurnLounge while dodging any real sort of mathematical questions about how they're going to make money!!
Across all of the forums on many different sites, they just keep repeating the same shtick. Like an online cult or something!
Posted at 8:50AM on Jul 19th 2006 by Musica360.com 0 stars
2. LMAO! I've been involved in a few forums speaking on BurnLounge's "business model". First of all the cultish followers of Burn Lounge never seem to directly answer questions on how they will actually make money besides signing up other members or have any idea about ecommerce conversion rates, promotion and the like.
But yet if you speak out against the model,
1. you're a "hater" because they're taking a chance instead of sitting on the sidelines
2. they point out that there are major corporations putting money into BurnLounge so it can't be a scam
It's totally amazing the baselss argumentents these people use in defense of BurnLounge while dodging any real sort of mathematical questions about how they're going to make money!!
Across all of the forums on many different sites, they just keep repeating the same shtick. Like an online cult or something!
I don't see BurnLounge as a company that will be in business for the long haul. MLM's don't last forever and once they become saturated the only ones who will have truly made any money are Burn Lounge from all the "moguls" who signed up and the very first ones who jumped in it and signed up a ton of people.
Posted by keefner at July 19, 2006 07:50 AM