I was invited by a friend to New York City’s Coffee Shop Lounge, where about 150 “b” and “c-level” independent music industry executives, djs, artists, performers, songwriters and ancillary music hanger-ons from all walks of the industry gathered to listen to a pitch from New York’s most recent “Music 2.0” (an acronym describing the post-crash Internet music economy) start-up, BurnLounge.com.
The company launched a multi-level, viral marketing campaign to have designated sponsors (otherwise known as “music moguls” according to their literature) sign-up partner’s interested in hosting a downloadable music store on their own web sites using BurnLounge.com’s music download store package.
A flashy, slickly produced, techno-laden infomercial was shown mid-way through the get together on the bar’s flat-panel tv’s, giving the crowd a generic look at how one can get involved in “making money” (as one of the principals emphasized in a follow-up speech) by selling music downloads as a registered partner in BurnLounge’s affiliate program. From the video, I learned about the three distinct tiers an affiliate partner can sign-up for; the Music Fan, The Affiliate and The Music Mogul.
The first tier, Music Fan, is for the general consumer or music fan who wants to feature tracks of his/her fav artists by embedding links to specific titles from BurnLounge’s catalog on their personal web page. The more tracks sold, the more points earned for redemption on BurnLounge.com’s site for prizes distributed as products or downloads.
The second tier, the Affiliate, is a program that turns downloads into cash. Targeted to small and medium sized web sites, BurnLounge will license their technology (basically a fully-functional download store with complete backend and transaction technology) for a richer user experience. Take this package and share a percentage of your download revenues with BurnLounge.
The third tier, Music Mogul, has a chief sponsor (or “mogul”) signing up a number of other web-based partners to create their own mini-network of sites. The Music Mogul manages those relationships, benefitting by taking a commission of sales of all tracks on his/her own download store as well as a percentage of all transactions within the mini-network of sites he/she is credited with signing into the program.
I admire BurnLounge.com for coming up with a way to spread their brand and using web services to generate sales with this multi-level marketing strategy, however, there are a few kinks in the armor if anyone thinks they’re going to make millions tomorrow from music downloads.
Mom and Pop are up against a formidable array of legacy download providers who currently have a tight strangelhold on the market and benefit from preferential treatment because of their size, traffic and revenue generating capability.
Take into consideration the folowing:
The article reported Napster is stating over $100 Million in cash reserves and 500,000 registered subscribers paying $9.95 a month. Not bad work if you can get it. One web site generates all those subscription fees! And, people said that would “never happen!” Well…it’s happening!
Real Networks claims 1.2 Million subs to its Superpass and Music store subscription service. Today, I cancelled my account because I can’t play Real files on an iPod, and frankly, I’m not interested in listening to radio content from sub-saharan Africa. I guess there are many people who need or want that kind of programming. More power to’em, I say! I love Real. I even own stock in Real, but until interoperability takes place, I’m on the sidelines for now.
The iTunes store, benefitting from Apple’s powerful marketing muscle and convergent digital lifestyle strategy, have to date sold over 500 Million downloads and almost 40 Million iPods. Remember, iPods can only play AAC and MP3 format. Sales of digital media players that play all other formats, including Sony’s A-Trac, Microsoft’s Windows Media and Real Networks Real Media lag far behind.
You cannot purchase songs from Burnlounge, unless they were in .mp3 format, to play on an iPod. It’s common knowledge that Apple will not license their proprietary AAC encoding format to other companies as they protect their idea by maintaining their market share and dominance. This single fact slices your potential download market in half or even more! No one at the event said anything about that. All they said is, “you can make money too.”
In addition, consider this:
BurnLounge.com license their tracks from LoudEye, a digital distributor. The company charges a (according to the biz dev person I spoke with on the phone two weeks ago) $100,000 upfront payment to help a client launch an online store using their technology with an additional $10,000 a month licensing fee to keep it running and have access to their music database.
The woman I spoke to broke down the commission structure for me. First, the label take is about $0.70 cents per download. Then, LoudEye takes between, I think she said, $0.12 to $0.18 cents a transaction, depending on the deal you broker with them.
So, for arguments sake, let’s say it’s $0.15 cents. BurnLounge.com takes $0.05 cents per transaction when you sign up with them. So, between the labels, LoudEye and BurnLounge.com, the total take before you see any money is a grand total of $0.90 cents. I think there’s even another split of a few cents for the publisher, or something like that, but don’t quote me on it, because I’m not exactly sure. Maybe that comes out of the label slice. I’d have to research it a bit more to be exact.
If you’re an affiliate, you have to share that $0.10 cents with your “mogul,” leaving you with 5 or 6 cents on the dollar. Now, figure in your overhead, web maintenance, employees, marketing costs, etc…
You’re making a few pennies on the dollar. You’ll have to sell hundreds of thousands of downloads to make any kind of real money. After marketing and promotion costs and other costs of doing business, it just doesn’t make fiscal sense to open a BurnLounge store. I’d rather go out and find investors and compete on a level playing field, then give BurnLounge my money and have to work ten times as hard to make ten times less than I could if I were and independent download store owner.
The BurnLounge folk say one of their partners, a Hawaain-based lawyer, made $50,000 dollars in commissions last month. His store consists of hard to find Hawaiian music, as I’ve been told. And, we don’t know what the terms of his deal are. Does he own the actual music? Is the music he’s sold considered major label music or is it niche music that only he has the rights to?
If you’re one of those 140 in the room, you’re competing with everyone else in that same room by having those same million tracks from LoudEye. The only differentiation is how you want your store to be perceived. Content on the home page can be changed to feature music that may interest your target audience, but is that the point?
Oh, one thing I forgot to mention, BurnLounge.com’s start-up fee is $144.00 or so, plus a montly subscription fee of around $12. So you’ve got to sell a lot of downloads to make up that estimatged $360 for the year, before you even can think about turning a profit.
Again, I’m not saying it’s a bad idea. It can work for some people. If you’re a Music Mogul and you sign up 100 sites that are premium brands, and they use the technology effectively and market to their customers, you can stand to make that $50K a month in commissions.
It’s the slackers that will kill you. Sign 100 restaurants and lounges and hope that they upadate their music pages and promotional web sites on a timely basis. Make the sites an integrated experience with the brick and mortar operation and maybe you’ll see some traction, but when it comes to online production, it’s tedious work just like any other data entry job. Why do you think we’re outsourcing all this data entry work to India? Because American’s are too busy consuming to do that themselves.
Now remember, you’re competing against major players in the download world; Apple, Sony, Microsoft, Napster, AOL, Yahoo and maybe someday Google. You’re at a immediate disadvantage because the iPod only play AAC and MP3 formats for audio and .mpg and .mov for video.
Major label content downloaded through BurnLounge is encoded with a DRM using other formats that won’t play on an iPod. I’m sure there’s a crack somwhere, but at the end of the day, it’s all about access and portability, isn’t it?
If you’re sitting at home cracking proprietary files, that’s less time you have for the beach, running, work or doing whatever it is you love to do. There’s a reason why million’s have downloaded from the iTunes store–it’s called convenience.
Being a pioneer in the Internet music space, many of my friends from the dance music industry who were at the event asked me what I thought about the program. I told them out of the 150 or so people who showed last night, only 2 (besides the BurnLounge principals on hand) will make any real money. Everyone else will decide that it’s too hard and that no one told them they had to invest so much time, money, energy and passion into something that gave them pennies as a return on their investment.
As for Netmix, would I open open a store? Well, for me it would only be a value-add to my constantly evolving business plan to drive traffic. Kind of a loss leader, like Walmart selling DVD players for $25 and CD’s for $10.
I’m not going to start my own music store, so sure, I’d partner up with BurnLounge to see what happens. It’s a write-off for me if I don’t make my $360 back and maybe I can sell some of the tracks I feature in my mix-shows, who knows?
Do I plan on making money with it? Well, from the looks of the rev/share split, I’ll be on social security by the time I get my first real check. I mean, even though you see all these Google adsense ads on my site, not many people are clicking on them and I’m not really sure why. They’re not as relevant to my content as I’d like them to be, but it’s hard to manage that, unless advertisers came to me directly.
You’d think with about 30 to 50 visitors a day to this blog, I’d be making some money with Adsense and the Amazon program, but I’m not making anything that makes a difference…not yet anyway.
I tell people all the time. The Internet is not the holy grail. You still have to know and understand your customer, provide value and excellent service. That takes time, energy, commitment and possibly an investment of capital. It is what you put into it. I don’t post enough to get a mass audience and it’s slow going. In order to make any real money on the web, you gotta hustle. Just like everything else. Get rich quick schemes only make the ones who think of them rich, and everyone else is used for their brainpower and hard work.
Remember what they say, “if it seems to good to be true, it probably is.” But then again, they also say, “if you can’t beat’em, join’em!” Take your pick!
Here’s my Google ad below…I guess I’m joining them…lol.
Sorry for double post who knows what happend
By the way these numbers are bases on sales of Products in your store where you are not the owner of the product
if you are the owner of music sold you get no less than 50% on any of your singles or albums sold on your site or any ones site
if you are not the owner then the system explained indicates what to expect
How it works is simple
There are 3 ways to be a retailer
Fan
Affilate
Mogul
THE FAN program allows you to earn burn rewards points and be redeemed for burnlounge music and merchandise.
AFFILIATE program
Affilates also earn burnrewards points but they can redeem them for cash
affilates can also build a sales team and make cash from the stores they sponsor, affiliates also earn bonuses when other stores sale music.
Mogul program
Moguls also earn burnreward points, redeem them for cash and build a sales team but moguls qualify for additional bonuses above those avaible to affiliates
Affiliates and Moguls earn cash in the same way!!! 2 basic rules apply
The 5 cent rule/The 2 cent rule
The 5 cent rule means that you will never earn less than 5cents on any 99cent download sold by you from your site! thats called a personal sale
The 2 cent rule
The 2cent rule means you will never earn less than 2 cents on any 99 cent download sold by your direct team; meaning the moguls affiliates or fans that you have personaly sponsored.thats called a Direct team sale.
When a customer downloads a 99cent download from your site you get no less than 5 cents thats 5 cents for every customer that visits and buys directly from your own site.
you get 2 cents when a member of your direct team sales a 99cent download from their site. They get 5 cents you get 2.
you get 2 cents from every 5 cents they make.
You earn more through shared compensation and concentric retail
Shared Compensation allows you to earn on a percentage of the profit margin of each product sold through your Burnlounge site
and on the sites of those people on your sales team.
On your sales, you earn 5 cents on the dollar or 20 % of the profit margin which ever is greater.
On your direct team sales you earn 2 cents on the dollar or 12 % of the profit margin which ever is greater
Earning money on the sales of stores other than your own is made possible
by Concentric retail.
Concentric retail Allows you to earn on the sales of stores in your direct team and beyond.
Conentric retail starts with your store at the center, The first ring around you is made up your direct team stores, the stores you personaly sponsored.
The second ring is made of the stores that members of your direct team sponsored
and so on and so on up to a max of 6 rings of stores beyond you!
Your store you earn 20%
Ring 1 you earn 12%
Ring 2 you earn 5%
Ring 3 you earn 5%
Ring 4 you earn 5%
Ring 5 you earn 5%
Ring 6 you earn 8%
_______________________
Concentric How it works is simple
There are 3 ways to be a retailer
Fan
Affilate
Mogul
THE FAN program allows you to earn burn rewards points and be redeemed for burnlounge music and merchandise.
AFFILIATE program
Affilates also earn burnrewards points but they can redeem them for cash
affilates can also build a sales team and make cash from the stores they sponsor, affiliates also earn bonuses when other stores sale music.
Mogul program
Moguls also earn burnreward points, redeem them for cash and build a sales team but moguls qualify for additional bonuses above those avaible to affiliates
Affiliates and Moguls earn cash in the same way!!! 2 basic rules apply
The 5 cent rule/The 2 cent rule
The 5 cent rule means that you will never earn less than 5cents on any 99cent download sold by you from your site! thats called a personal sale
The 2 cent rule
The 2cent rule means you will never earn less than 2 cents on any 99 cent download sold by your direct team; meaning the moguls affiliates or fans that you have personaly sponsored.thats called a Direct team sale.
When a customer downloads a 99cent download from your site you get no less than 5 cents thats 5 cents for every customer that visits and buys directly from your own site.
you get 2 cents when a member of your direct team sales a 99cent download from their site. They get 5 cents you get 2.
you get 2 cents from every 5 cents they make.
You earn more through shared compensation and concentric retail
Shared Compensation allows you to earn on a percentage of the profit margin of each product sold through your Burnlounge site
and on the sites of those people on your sales team.
On your sales, you earn 5 cents on the dollar or 20 % of the profit margin which ever is greater.
On your direct team sales you earn 2 cents on the dollar or 12 % of the profit margin which ever is greater
Earning money on the sales of stores other than your own is made possible
by Concentric retail.
Concentric retail Allows you to earn on the sales of stores in your direct team and beyond.
Conentric retail starts with your store at the center, The first ring around you is made up your direct team stores, the stores you personaly sponsored.
The second ring is made of the stores that members of your direct team sponsored
and so on and so on up to a max of 6 rings of stores beyond you!
Your store you earn 20%
Ring 1 you earn 12%
Ring 2 you earn 5%
Ring 3 you earn 5%
Ring 4 you earn 5%
Ring 5 you earn 5%
Ring 6 you earn 8%
_______________________
Concentric/ YOU /of the profit margin
I hope this is understood !!!!
http://www.zellymusic.com
Trinity,
Ok, I read all that in the http://www.explainburnlounge.com/docs/ConcentricR… file.
I guess the question is, "What is the profit margin?" Because right now, it looks REALLY SMALL (and even negative in some cases). Any idea to figure at least a RANGE that it might fall under?
As Tony said, let's go with the $0.70 to the label. That leaves $0.29.
Loudeye gets between $0.12 to $0.18 per download.
That leaves $0.11 to $0.17.
Tony says Burnlounge gets $0.10 per download. That would leave $0.01 to $0.08 per download leftover for retailers.
If that is so, then the numbers just don't even add up anymore. Because you are getting $0.05 minimum, and presumably one up from you is getting $0.02 so that is $0.07 cents.
The $0.99 doesn't split that many ways. And we aren't even going upline past the direct team yet.
Can you explain how it works? Thanks!
http://www.burnreview.com/documents/docs_instant_…
I am not sure if this will come up as a PDF. Try it… I will attempt to cut and paste below:
LICENSING AND MARKETING YOUR MUSIC THROUGH BURNLOUNGE
WHAT IS BURNLOUNGE?
A first in the world of music and entertainment
BurnLounge is the world’s first community-powered digital download
service that allows anyone, in a matter of minutes, to open their own
customizable online music store.
A new kind of sales force
Because BurnLounge retailers can tailor the presentation of their store
and select the music they promote, they become an entirely new kind
of sales and marketing force for the music they love, recommending
and selling it to family, friends and fellow fans.
What this means for artists and labels
For artists and labels, BurnLounge has created a compelling new
promotional channel, driven by a built-in community of devoted fans
eager to endorse and spread the word about their favorite artists to
music-hungry consumers. And because the BurnLounge community
is interconnected, music has the potential to spread quickly to
entirely new audiences.
BURNLOUNGE LICENSES THE WORLD OF MUSIC.
BurnLounge licenses music from the catalogs of ALL four major labels…
…from a host of major digital aggregators of independent music…
…from a growing list of independent labels in the U.S. and
abroad…
…and directly from independent artists themselves,
some of whom have their own BurnLounge stores.
(Labels with large numbers of titles do not need
to submit copies of their music with the License Request Form.)
Questions can be directed by email to aandr@burnlounge.com. You can find answers to many questions
in the BurnLounge Licensing FAQ, available in the Training section of the BurnLounge B.M.S. Resource Center.
After the License Agreement is sent to you, review, sign and return the agreement.
HOW ARTISTS AND LABELS CAN USE THEIR OWN BURNLOUNGE SITE.
Licensing your music to make it available to thousands of BurnLounge stores is just the first step.
The next step is to become a BurnLounge retailer yourself, which gives you the ability to assemble
a far-reaching sales team for your music.
Here are some ways artists and labels can use their own BurnLounge site:
• Artists and labels can market, promote and distribute their music online.
• Artists and labels can link to their BurnLounge store from their existing
web site. This enables them to sell their own downloads to fans,
as well as any of the music in the entire BurnLounge library.
• Unsigned artists can set up a distribution network by inviting
their fans to become retailers.
• Unsigned artists can be featured on the home pages of
BurnLounge stores alongside established, major label bands.
• Qualifying artists and labels can create a network of
BurnLounge fan stores — without having to open and
maintain their own — through the BurnForce program.
For more information, email aandr@burnlounge.com.
FOUR EASY STEPS TO LICENSING YOUR MUSIC THROUGH BURNLOUNGE.
Download and complete the License Request Form, available in the Forms
section of the BurnLounge B.M.S. Resource Center.
Send the request form with a CD of your music to the
BurnLounge A&R department.
I went to a meeting at Sutra in NYC the other night. It was very "Amway"-ish to me. If I am not mistaken it's $444 to sign up as a mogul. I think there is an annual fee too. Tony I appreciate this blog and I will fwd it to a few other folk who are VERY CLUELESS as to the profit margin. I must say I am a skeptic. As an artist myself, I can see how it can get my music heard however I question the Licencing agreement you have to strike up with BL. There is a Fortune article on them April 3rd, 2006 issue be Reed Tucker and a Billboard page by Antony Bruno in their "Retail" section. Check them out.
What a site here! I am amazed at all the the talk about this “BURNLOUNGE.”
Let me just say this…There will always be critics of anything like this. I’ve noticed that Amway has been mentioned here quite a few times–ALWAYS in a negative sense. Nobody seems to take into consideration that Amway has been around for 30 years now! They also generate around 6 BILLION a year in revenue…and they’re DEBT FREE! Not too many businesses can claim EITHER! How about Mary Kay? I could go on and on. Well, you say, “It’s a ‘pyramid'”–Duh, just about every major business entity in the world appears to appear that way, after all, there’s usually one person at the top…and it spreads on down from there. The closer to the top you are, the more money you seem to make. If that’s not a “pyramid”–I don’t know what is! When it comes to MLM, one merely needs to know how to market their products…and themselves. Most do not know how–which is why they can’t make it. That doesn’t mean that there is something wrong with the product, or the company. That means there’s something wrong with THEM!
It takes a lot of work–and most are simply TOO LAZY–they want something for nothing! Well, there’s no free lunch; You’ve got to do the work…and that’s in anything!
Likewise. just because you’re an “expert,” doesn’t mean you’d recognize a good idea if it banged you over the head! Consider this, Lord Kelvin, a Scottish engineer, mathematician, and physicist, in 1899, had this to say about radio, “Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax.” Or this statement by Ferdinand Foch, commander in chief of the Allied armies at the end of World War 1, “Airplanes are interesting toys but of no military value.” Or this, by Elisha Gray, renowned inventer who eventually relented and turned in a patent for the telephone–mere hours after Alexander Graham Bell submitted his, “Bell seems to be spending all his energies in [the] talking telegraph. While this is very interesting scientifically, it has no commercial value…I don’t want at present to spend my time and money for that which will bring no reward.” Or this, comment by Lee De Forest, the “Father of Radio,” “While theoretically and technically television may be feasible, commercially and financially, I consider it an impossibility.” How about this Yale management professor’s response to future Federal Express founder Fred Smith’s thesis proposing an overnight delivery service, “The concept is interesting and well formed, but in order to earn better than a C, the idea must be feasible.” And who can forget the Chairman of the board of IBM, Thomas Watson’s comment in 1943, “I think there’s a world market for maybe five computers.” I could list even more but I hope my point has been made.
The simply fact is, BurnLounge is an idea that has been in the making for approximately 4 years, and the people behind it are serious about changing the way we buy our music–AND Ring Tones, Movies, Games, Books, etc. They’re only getting started with the music. Granted, they only offer about 1.5 million tunes for now–but that will change. The 2.0 service will be out in 2007…WATCH OUT! (anyone who remembers i-tunes when they first launched will know full well that it sucked in the beginning…as did AOL 1.0–now they’ve got 13.0!). Furthermore, I know a few of the guys who sat down with Alex Arnold some four years ago when this thing was nothing more than four bullet points on a napkin. When Rick Dees (American Top 40) saw it, he said said back then that this will change everything! Believe me folks…it WILL INDEED!!! You can criticize it all you want, but the fact of the matter is, it WILL have a major impact on the way we buy music, movies, etc….and there are some very big players involved who will see it through–while it passes YOU by, I might add.
I might also add that several BIG NAMES have aligned themselves with BurnLounge as well. Names like Elvis Presley( well okay, Elvis Presley Enterprises), Hootie and the Blowfish, James Brown, Danica Patrick, Ted Nugent, Stryper, Doc McGhee, and many more. Also, some new artists, like Coffey Anderson (Most likely BurnLounge’s first Platium artist), and Just Jinjer ( from South Africa…they couldn’t get a record deal when they moved to LA–but they’re doing great on BurnLounge), and so many more.
The fact of the matter is, movie downloading is already hurting Blockbuster so bad that they will not be around much longer. And the world’s largest record company, Tower Records, filed bankruptcy last week. All the while, LIVE NATION partnered up with BurnLounge a few weeks ago…and more are lining up. Nokia has also partnered up with them–and their phones will play the BurnLounge downloads. Verizon’s new chocolate phone will too. Everybody keeps talking about the i-pod this, and the i-pod that–Well I’m here to tell you–the i-pod will be like the 8-track & cassette tapes–GONE! The trend is going to EVERYTHING on your phone–NOT having a phone AND an i-pod…and whatever else. Go to Europe, Asia, etc. and check it out for yourself. BTW, nobody said a WORD about the fact that i-tunes does not even have albums! BurnLounge DOES…and to stay “qualified as a “Mogel,” one must purchase 2 albums a month (there’s where some more of the money is generated for payout). Talk about “incentive!” I GUARANTEE you that MY family and friends will be (are now) buying their music from me (or they’ve got a store of there own (which ALSO benefits me). Add to that, all of the other BurnLounger’s out there who have family and friends (which is growing so fast it’s unbelievable), and you cannot help but put a BIG DENT into Apple’s profits (which do not come from i-tunes at all, but from having to buy the i-pods to play the music). Here are the facts, the brick and morter stores simply cannot compete with BurnLounge–they have no inventory, no buildings, NO ADVERTISING!!! Furthermore, at LEAST BurnLounge is making it possible for the average Joe to get involved on three different levels–ALL of which give the Fan, Affiliate, or Mogel, an opportunity to put a little something back into their pockets, whether it be “rewards” or “cash.” What does i-tunes give you for buying your music from them? Surely you’ve got to appreciate a service that gives you something back in return–they’re way of thanking you for doing your business with them! On top of it all–it’s FUN! Where else can you have your own, customizable, digital download store, which, while it only has music now…will have Ring Tones, Movies, Games, Books, Concert Tickets–all for as little as 29.95!!! The MOST it would cost a Mogel (taking into account the upfront costs and the monthly album sales to qualify, and a couple other monthly [optional] charges), is no more than $900. I don’t know too many businesses that a person can open AND operate for that meger amount. And speaking about “making money,” Well, I’ve SEEN the checks–so I don’t need to go there!!! When Papa Johns started out, he didn’t put his focus on making money off pizzas–he put his focus on setting up franchaises (@ $250,000 a pop). He did this for nine years. He knew one could only make so much money on a ten dollar pizza. Same here; One can only make so much money on a 99cent download (or a 10 dollar album, for that matter)–ESPECIALLY when you consider than only 1% of the world has even downloaded a song before! However, that’s where the REAL money comes in (as far as the music goes)–because that number will continue to grow…and FAST! Those who already have their stores in place will be in a position to reap the benefits. And with it–profit from Ring Tones, Movies, Games, Books, Concert Tickets, etc.
Believe what you will, it’s your right–but you WILL BE downloading all of this stuff ONLINE in the near future, wouldn’t you prefer to get a little something in return for a change? I’m not sure whether or not I’ll be back on this site or not (as I found it by accident), but if anyone has any GENIUNE questions about BurnLounge, feel free to drop me a line at: CatchTheWave@UBurnDigital.com…or call 815-788-8887. I have nothing to hide–and I have a vested interest in helping anyone who is SERIOUS about BurnLounge and having their own store. God bless you all!
That's an intelligent comment if I ever heard one. Doesn't dignify a response.
Tony,
I understand where you are coming from, and believe me when I say, I was one of those people that signed up as a Mogul, dropped the $450, and then, exited stage left.
HOWEVER
I have reinvented only my time now, since I decided I would not let this thing just go to waste. By simply pitching this concept to a few college students at a large university nearby, I was able to recoup my investment. Then, something strange happened. Those student went and told others, and wouldn't you know it, I started to see a little more cash trickle in, and over the next 2 months, I have built a team of retailers that got involved for various reasons. I have made triple my investment back in 3 months.
Now, if this thing blows up in my face, oh well, it was fun, and gave me the chance to be a part of something that is growing by the 1000's.
I also get a kick out of your "I'm only doing my democratic duty to inform everyone else of what is right and wrong.." blah blah blah. No you are not. You are telling your OPINION to others, which is why you have a blog, and are not hired by Rolling Stone, Entertainment Weekly, and to a larger extent, why you are not not qualified to write a "consumer report" style blog.
I have no idea why you keep saying that "the further away from the top, the less you make" crap. Really? OBVIOUSLY if you are starting out, and you are below someone, you make zero until you get others involved. But, and I think you've missed the boat here, there is no DECREASE in the amount of $$ you receive when others go lower then you. You get the SAME amount/download from them, and so on, and so forth.
The bottom line is, it's not for you.
One thing to keep in mind. What's going to happen if, let's say, Microsoft decided to really get into this game, and wanted to possibly find a partner like a Burnlounge community that will reach millions upon millions of consumers? Do you know? This is the same Microsoft that overtook Apple years ago to become the largest seller of software in the world.
If that happens, the only thing you'll be writing about is "Why I did not invest my $400" in case this thing does go that direction. I'll take the chance. Making the $400 back is NOTHING. Not investing the $400 and being sorry means much more.
I respecfully disagree with your statement. Here is why…
Okay, you invested your $400, and now you’ve recouped your investment, times 3. Let’s break that down and determine how much TIME you’ve invested and what is the value of that time? Is your time worth $10 an hour, $15? How about $20. How much time have you spent on this project and have you accounted for that time? Did your revenues generated cover the costs of your time? Meaning, did you make that time investment back? Because if you’re working on BurnLounge, then you can’t really be working on something else, right? Last time I checked, it’s pretty hard to do two jobs at the exact same time. Sure you can make a few bucks from BurnLounge, but if that’s not covering your hourly wage, then is it worth it?
Next, how often do you use your cellphone for business? How often do you use your computer? Your home phone, if you have one? A portion of your rent? Because you are self employed as a BurnLounger, are you making your money back to cover those costs. I mean, you can’t run your BurnLounge store as a homeless person on te street, without a roof over your head, a computer on your desk and a phone in your pocket. Are you making that money back? If so, how long did it take you to make that money back in MUSIC SALES. Not in MOGUL SIGN UPS.
I know you get, like, 50 bucks for every mogul you sign up. Sure, anyone can make up their investment if they get a few moguls to sign up, but let’s strip out the moguls and where are you in real music sales? Post your numbers here, I want to see them for myself.
And, let’s talk about the fact that there is only one place on the entire Burnlounge web site that tells its users the files do not play on “Macintosh Operating Systems.” That is misleading, because they should say that the files do not play on iPods. I’m sure there are many people who don’t read the fine print. Even if they do, I’m going to go out on a limb to say that the general belief is that “Macintosh” means the computer itself and not the iPod.
Okay, so you paid your mogul fee. The kids you got involved paid mogul fees and now you got your investment back. If it weren’t for their mogul fees, would you have made your investment back on the sales of downloads alone? Where’s the beef? Show me proof!
I don’t understand. If you’re a mogul and you take 2.5 cents from another mogul everytime he sells a track, are you saying that if that mogul signs up another mogul, then he/she takes 2.5 cents from that moguls sales? But then don’t you take a percentage of his percentage? He’s really not getting all the money, right? So, when does the long tail end? When do moguls run out of moguls? You can only go so far before you get to a group of people who don’t want to be BurnLoungers. That’s what happened to that MLM phone company that went out of business a few years back. At the long tail, the millions who aren’t as motivated affected the business of the hundreds that were. You can only keep people motivated for so long, then what do you do?
Another problem with BurnLounge is the fact that all customer support is done by email. Why? If BurnLounge is so huge, then take the phone call instead of doing it all by email. That, to me, is bad planning and can lead to confusion and horrible customer service. You have to be able to speak to your people to guide them.
The bottom line is not that it’s not for me. I considered it for a minute. Knowning the Internet business and what I would be up against without being able to advertise my BurnLounge site (according to the fine print, you can’t advertise your site anywhere), it is clear that the restrictions are onerous, the pennies only trickle in and the system won’t work with 70% of the music players in the marketplace. Taht’s why they are trying to diversify, because they know they can’t live on music alone. It’s a no win situation.
Your vision that Microsoft will get involved and millions will become BurnLoungers gives me the chills, because the history of MLM companies shows their is a plateau and then a crash, because many people at the long tail become disincentivized to participate, since they’re only making pennies from the moguls above them. I say PONZI…that’s my opinion.
You can’t keep millions motivated by pennies, it’s just not a business model that stands up over time. The money runs out my friend, then what? They who do you call? I believe in equal competition. With BurnLounge, the people at the top have the unfair advantage.
As far as my qualifications, my brother, I’ve been the CEO of a major Internet web site which I sold for over 3 Mil in 2000, managed the production of first-to-market Internet applications for major media companies, have been written about in major music industry trade publications, have been asked to sit on panels at major music conferences and am currently the VP of Music at Entertainment Media Works.
I’ve been in the music business for over 25-years professionally in various capacities starting out as a club DJ in Boston then achieving Billboard Dance Chart Reporter status while managing record labels and assisting in the careers of high profile artists. I’ve done more in the music business than most.
Some key music writers have described my contribution to online music as “pioneering.”
I have no idea what your background is, but I am more than qualified to speak about the scam you call BurnLounge, which is an apt name for a ponzi scheme that one day will fold like a house of cards.
That’s my professional opinion, which I stand by. With SnoCap launching their new service for artists to sell direct from their own sites and MySpace, BurnLounge is going to take a huge hit.
But, you know, my opinion doesn’t count for much. According to you, I don’t really know all that much about any of this 🙂
And, who reads Rolling Stone now anyway? US Weekly has surpassed Rolling Stone as the premier mag at Wenner Media. But you wouldn’t know that, of course, because your not involved as deeply in the industry as I.
BTW, I actually had a job interview at Rolling Stone a few months back and I turned it down, simply because they have no idea what they want to do online and they’re looking for someone to save them from the blogosphere. I’m not joining a sinking ship. I’d rather blog on my own than be told what to write about by a major media editor, where corporate shapes the message.
So, go ahead and diss my credentials, but let’s compare resumes and see who’s got more music industry experience. While you toil away selling music for pennies, I’m working with major and independent record labels on new revenue opportunities that will far surpass your singles sales.
Tony Z.
retailer store name or a zip code.
Know how many retailer store names I know? Zero. You know how many people in my zip code are carrying music I want? Zero.
I'm objective, but based on the fact I can't even find a song that I want tells me all I need to know.
Have you ever tried to search for a song or artist on BurnLounge? Well you can't.
YOu need to know a retailer store name or a zip code.
Know how many retailer store names I know? Zero. You know how many people in my zip code are carrying music I want? Zero.
I'm objective, but based on the fact I can't even find a song that I want tells me all I need to know.
Again Tony, you've just sat here and rehashed the same arguement over and over again. I undertstand and fully admitted, as have others, that merely selling the song or albums is not what is going to make you money. It's building a business with others that share the same interests, and everyone else getting a piece of that interest.
If I own my own tanning salon, for arguements sake, and I start small, it's going to take a while to generate enough $$ to make my money back, and then, taking into account your "what is your time worth" arguement, it might NEVER make that $$ back depending on what you think you are worth. It's about doing what you LOVE.
If you are NOT interested in music, you will never do this. If you are not interested in downloading music, then you will not ever do this. If you are stuck in IPOD and refuse to look into anything else, then you will probably not do this. Those people are of little value to me or anyone else. Just like if I own a tanning salon, I'm not going to talk to someone who's allergic to the sun, or just recovered from skin cancer.
My focus is on those people that are ALREADY downloading music, be it to an MP3 player, or the MILLIONS about MILLIONS that download to a PC and burn the CD's to listen in a vehicle or home audio center.
Once you get that business going, and generate the interest, and people get it, then you get $$ back for the people you signed up, $$ from the people they signed up, and it goes on and on. Yeah, it's similiar to a pyramid, except I'm not telling someone that they have to carry $100/month worth of beauty products to qualify for commissions. I'm telling them "Hey, if you are burning or downloading 15-20 songs per month, why not get paid to do it, and get your friends involved?".
WOW. What a concept. Doing something you love, and selling that, and then getting paid for it. It's amazing huh?
I could care less if it's not for you, but saying or "informing" others that you think it's a waste of time or not worth it, (and this is the key coming up here…drum roll please) WHEN YOU HAVE NOT EVEN BEEN A PART OF IT, is foolish.
Why would I buy a car from someone who has never driven in one? Why would I go see a movie or decide whether or not to see a movie if the reviewer only tells what he THINKS it might be like? The answer is, "I WOULD NOT" and Tony, neither would you. Yet, you find it useful to make recommendations and rip something that you learned about by sitting in a room and keeping your skeptics hat on.
If it's not for you, it's not, but my contention with you is that you said a statement that was laughable at best regarding "your democratic duty to inform" the public. That is laughable.
Oh, and finally, one point.
It took me all of 2 hours to sign 3 people up, 2 hours that I spent from 6-8pm at a university while they sat and ate what they had ordered. If you know what you are talking about, and can present it in a knowledgeable way, it is not difficult. It's not a hard decision.
Hell, one of the guys that signed up under me signed up 5 others as well, 2 from a different level, and not only re-couped his investment, but had some $$ left over for "college stuff" (as he put it).
Now, this is JUST music we are talking about here. I'll be laughing when my store is linked to the sales of MP3 players, video games and equipment, DVD's, and concert tickets (oops, that has already happened). Those larger ticket items worth more, spread out over a network of stores, represents more $$ then merely the .5c or .2c downloads. Backed by the fact that famous people such as Hootie and the Blowfish, Avril Levine, Randy Travis, Rick Dees, and a few NASCAR drivers, are all on board and promote this concept and idea, I'll take my chances.
Oops, I took me 10 minutes to write this response, so technically speaking, I probably threw about $8 out the window!
I was at a BL event and the concept didnt appeal to me as a business opertunity. The pyramid scheme model was a turn off. But, what was even more of a concern was, lets say there are 1000 sites with the same music offered. Why would anyone come to my site to download music of any format. If I build a network of fans, affiliates or moguls – Why would anyone come to my particular page to download music. It seems the way BL is making money is to sign up moguls. Not selling music. And that seems to be the argument of those who advocate this service. Its object is not to sell music, its to sign up moguls. (MOGULS! – LOL – making pennies per download – watch out Diddy) As a way for independent artists to sell there music its seems o.k., but I dont know what the deal is as far as the cost for seling your music through BL. You can do this through many sites such as TuneCore. Its less expensive to create your own website and promote through myspace, garage band, tight tunes, sound click I sound, numberonemusic, etc. etc…. Im also sure I-pod is greatfull for all the publicity their getting in this forum but they are not the first and only makers of mp3 players. So if I-pod has 70% of the market that doesnt leave 30% to non mp3 playing devices. There are many makers of these devices. So that makes the BL situation even harder for me to get into. Like one writer says, its just not for me. – Sean in RI, I respectfully dont believe you. I need more information if you please. When you sign someone up, how much of their initial sign up fee do you get?
EBZAR:
That's exactly what's up.
BurnLounge believes it is offering the small business owner an opportunity to make money selling downloads, but they tell you in the fine print that you can't advertise your store in any way outside their system. So, how are you supposed to generate revenues on downloads if you can't advertise on a club flyer or a local entertainment section of the newspaper?
BurnLoungers selling mogul packages to other BurnLoungers is how these guys and girls and making money. Burnloungers say all these important people are involved, but what they don't know is if those celebrities actually paid the mogul fee to BurnLounge, or did BurnLounge offer them a store for free just to use their name in the marketing effort.
According to Sean in RI, we should all sign up for BurnLounge not to "make money" but to "do what you love."
So, that's it! That's the holy grail of the BurnLounge experience. Pay us $400 plus per year to have a BurnLounge presence, and just go out there and "do what you love."
But that's not what BurnLounge is selling. I was there, in a meeting. They are selling you on the idea that you can "make money" using the BurnLounge platform. I can sign up as an affiliate through Commission Junction for iTunes and make the same amount of money I would if I had a BurnLounge store. AND, I DON'T HAVE TO PAY A DIME.
Sure, I don't have the right to use a custom-built Flash application using iTunes, but so what. I can still get the links and sell the song I want to from my web site, without having to pay x amount of dollars to use a platform that I can't advertise or promote anywhere.
Or, as EBZAR suggests, Tune Core, and now Snocap if I'm selling my own songs.
I want to know how many BurnLoungers are making more than $500 per month in download fees? NOT in Mogul sign-up fees.
And, out of those BurnLoungers achieving that milestone, how many were in it at the beginning, how many in the middle, and how many just joined?
Of course, if you ask BurnLounge, they're probably not going to tell you that info, so it's left to speculation to figure it all out.
Now, I just found out that a BurnLounge rep is invited to speak at an upcoming Digital Media Wire Conference in LA. A respected organization such as DMW should do their research on BurnLounge before offering up a spot on a panel with companies who have earned the right to participate based on sound business practices, and not the house of cards BurnLounge is promoting.
EBZAR, I've heard that a BurnLounger makes a commission of $50 for every mogul he/she signs up.
And Sean even confirms it, that the money is made from signing up others and not as much is made selling actual music. He is more proud of signing up new BurnLoungers than he is of selling a few tracks here and there.
So, is Sean's point that he's making money selling downloads or is it that he's making money signing up others, who then sign up others?
He also says that larger ticket items are now avail, but let's find out how much a BurnLounger gets for selling a few tickets. Maybe a few bucks, but that's all. Remember, you can only sell one concert or maybe even 5 dates from one artist, but Ticketmaster, the venue and scalpers were there long before BurnLounge. On hot events, BurnLoungers will be prevented from selling tix to sold out events, because others will have beat them to the process.
Sean says, I sat in that room with my mind made up. He doesn't know because he wasn't there. The night I sat in that room made me sick to my stomach, to hear the Chairman of BurnLounge rah rah everyone without telling the truth.
BurnLounge is a company that sells a PONZI scheme to others and won't give them the answers they are looking for, unless you really read the fine print, and that's even if you understand it.
I don't like the company's business practices, and I think if better thought out with a system where everyone plays on a level playing field, with no one mogul reaping the commissions off 20 others while other BurnLoungers have to work harder to sell, is an even and fair marketplace. But that's not what BurnLounge is.
Tony Z.
Thank you Tony for the info. So, Sean in RI says he tripled his money. Does that mean he signed up 24 moguls. (Moguls, I love that – you will be a MOGUL! lol) Sean must have very wealthy friends with money to blow doing what they love. Which is what? And if they are that wealthy they dont need BL to make money. Sorry Sean, your not helping.
Sure, EBZAR. Since I attended that BurnLounge meeting last spring, I continue to be amazed at the snow eskimos will buy.
It's a sad state of affairs in the course of human existence that people still fall for these types of MLM marketing programs.
I have deep reservations about it, mainly because of the way it's set up. If everyone played on the same level playing field, and territories were carved out with boundaries that others respected, as well as meaningful marketing literature and support that all BurnLoungers had access to, including co-op marketing dollars, flyer support and other programs, then I'd be positive about it.
But the company misleads people into thinking they are going to make money selling downloads, when that's just not the case. Even the ticket thing is bullshit. Excuse my language, but it is.
So, BurnLoungers get access to the same Ticketmaster feed as a hundred other web stores. But where do people go to get Tickets…well…Ticketmaster.com for one. Just because I have the right to sell a ticket through a BurnLounge store, doesn't mean the ticket is going to be available to sell.
And, my BurnLounge shop isn't going to have the same type of resources, for example, stadium seating charts, that a Ticketmaster has. So, how am I going to compete with Ticketmaster for that sale to get my piece.
Books…magazines…cd's…please! I have books and mags posted here on this blog and no one is linking through me to get them, even though I drive a ton of traffic. They are going to go straight to Amazon or B&N. Why would they buy from someone who isn't even a bookstore and has no experience selling books.
It's just plain stupid, if you ask me. Here is Tower Records, going out of business, and they sell books and DVD's and Tickets too. So, if Tower is going under, what makes some kid from Kansas think he's going to compete with Amazon or Ticketmaster or iTunes.
The idea that you can become a "mogul" reeks of snake oil sales techniques. You are NOT GOING TO MAKE YOUR MONEY BACK ON DOWNLOAD SALES. By the time the market turns and the other 30% of your customer base is interested in buying from BurnLoungers, how many downloads are going to be generated by those 20K BurnLoungers? How much rev generated?
I'd rather invest 100K and open a pet store in a small neighborhood with a lot of pets and compete with Petco for market share, than try to open a download store and compete with Apple, Sony, Yahoo and MSN. People don't want to have to drive 10 miles to a pet store, but they can certainly choose the major player instantaneously on the web.
This program makes me so sick to my stomach that I have to rail against it every chance I get.
Tony Z.
Now that thats settled – http://www.numberonemusic.com/datryfemc
Let us know what you think.
Thanks T.Z.
Hi Tony,
Thanks for the info. I had the same bad gut feeling the first time I heard of Burnlounge.
A Friend has become involved and I worry…..
More troubles for B.L. – Now with the launch of MicroSofts Zune MP3 player, challenging Apple's I-Pod dominance, What will B.L. Do to make its service look appealing to its potential 'MOGULS'?
And tony – did you check out our music on N1M -I know your busy, but can you throw us a bone please. Have a listen – it wont hurt your ears. And I think we have more to offer than B.L. – We might even make you a 'MOGUL'.
I'm wondering if Burnlounge will be able to distribute music in the new MS format? Correct me if I'm wrong, but I believe there are differences in the DRM scheme between the old Windows Media format and the new Zune format. If Burnlounger's don't have access to this format, then they'll be left out of the Zune launch party. Plus, Microsoft is opening a store to integrate with the Zune, so that doesn't bode well for Burnlounger's either.
Additionally, what about the new company, SpiralFrog, that is going to give music away for free in exchange for the customer listening to advertising? AND, Myspace and SnoCap allowing bands to sell music from MySpace pages.
With Napster looking for a buyer, Real Networks solidly owning the subscription service alongside their partnership with the in-home wireless device, Sonos, the digital music market is getting really, really tight. I don't see a company like BurnLounge surviving in this market. Their underlying business model is shaky, and you just can't depend on 20,000 quesionably trained BurnLounger's to save the company.
I'm sorry, I haven't had the chance to check out N1M, but I promise I'll do so soon. I've got a lot on my plate, but I'll get to it!
No thanks, I already am a 'Mogul." LOL! Then again, according to some of the comments written here, I'm just a stupid blogger! HA!
Thanks for responding – about the MOGUL thing, Thats just my since of humer or lack there of. I checked your stats, you're BIG PIMPIN'. Thats why I asked you to have a listen. I dont know if you like Rap, but I like to get the opinion of people who are not really into it. Thanks again and yes – I think B.L. would have been great 5 years (or even more) ago. That would have given it a chance to get some momentum. But its up against too much competition at a much better price. (Jamic – if i spelled anything incorrectly, Pard-in me.)
Yo EBZAR:
I checked out your tracks. Yo…that shit is hot! Keep grindin, kid! Really well produced. I'm surprised you're not out on a label right now, unless there's something I don't know.
I grew up on hip hop, but I predominantly spin house. I'll give you props though, cause the beats are tight, the rhymes are on the money. I'm diggin it.
Keep up the good work!
I don't know about my stats. Yeah, a few people check me out here. I been around for 10 years plus online, so I've built up a pretty good audience.
Netmix today, is a shell of it's former self. Back in the day, I was doing a million uniques a year. Today, I'm just keeping it my little side hobby while I finish my degree at night at NYU and set up StarStyle.com music.
I love having a forum, that's all. Just like you rhyme, I write. As a matter of fact, I've written some lyrics. Not as good as what you've got, but one day I might do something on the house tip with hip hop lyrics, kind of a spoken word type thing. At the big 4-0, I gotta represent for Gen X. If I try to front and wear a grill like Diddy, I'd be laughed out of the Apple.
Peace my brother,
Tony Z.
Thanks T. – Were trying to do something different (Be relevant).
As far as the label thing, I shouldn’t discuss it in a public forum (AIM or email – I don’t know if you can see my email address.). I don’t want to piss people off before we get some kind of deal (or after). I keep it real but I don’t burn my bridges either. I'm also trying to build good relationships. I just hope people are thick skinned enough to handle the truth.
Right now were being shopped by some execs who think were good enough for them to at least bring our music into their meetings. So at least its not going straight into the garbage. I don’t know what happens after the meeting.
By the way – I'm not TRYFE. I'm Kev. (Manager, Producer, Engineer, Owner of creator of EBZAR, etc.) If you checked out the pictures – I'm dude with the braided hair. Also, I'm in the Bronx.
As far as house music, maybe you know of a friend of mine. Paul Simpson. He connected me to my REAL engineer. The engineer who did some mix's for us is Tom Moulton. He is some what of a legend.
I will be looking for StarStyle
Peace my dude.
KEV / EBZAR
I sent an email to info@netmix – Please, let me know when you get it.
Peace brother T.KEV / EBZAR
Tony – were going to try to get out to the MIDEM conferance theis January. Im sure you've heard of this event. What are your thoughts?
WHY IS BURNLOUNGE WAY BETTER THAN iTunes? There are several reasons… (1) iTunes only allows us to be a customer. (2) BurnLounge payout better to artists who want to make a name for themselves. Will iTunes give you a 50% deal? Not a chance. (3) iTunes has about 1.7 million songs vs. BurnLounge's close to 3,000,000. (4) Once again… and this deserves being mentioned twice… iTunes does not allow me to profit. PERIOD.
BurnLounge RULES!!!
http://www.ryanbaloy.com
My wife and I just joined in September been in the business about month and half and we have made all are money back in the first month and are next check this week will be 600+ dollars for a week. we have only had 5 people sign up directly under us but we have helped alot of people sign up under someone else and has helped out the team.