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.
Question for Eric and Jen – Is that from downloads or from Signing up Moguls?
I just wanted to add that I am a retailer and I love Burnlounge and all that it stands for. I have been in the company just a few months and have already made a few thousand dollars which goes to prove that the entrepreneurial spirit in the United States of America is alive and well.
All I keep hearing are people putting down everyone that wants a chance to make it for themselves in this country of opportunity. My parents told me I was wasting my time. My friends didn't understand why I would wast my time when the others had 70% of the market already.
But what they were looking at was the existing market and only one product. If I have learned anything in this country is Americans love opportunity and change. They like competition because it creates growth and betters the source of inventions. Good old R&D without it we just wither and fade. When Microsoft hit the market their computer crashed on the stage in front of their perspective customers and investors. They just kept going no matter the opinions of the others and now they rule.
IPODs needed a market to sell. Thus was created ITUNES. If you had said that digital downloads will never work then you probably would look pretty silly right now. If you had said that DVDs will never be popular you might consider a different train of thought today. And when BURNLOUNGE is the new BEST BUY, TOWER RECORDS, etc…..
Then we will know the truth. But for now it is all pure speculation. Or is it. Well not for me….
I think all of you are answering your own questions. Music downloads are just the beginning. Those of us that do not have our own albums are not going to make it rich from selling music from our own stores. We can, however sign up new talent that does. When they sell their music we get a commission. Best of all, we can sign as much talent as we want. And yes! we make money from signing other people, much like sales people from your companies that you work for get commissions for their efforts as well. The only difference is that everyone gets to benefit from a single persons efforts in Burnlounge.
I too have people in my group that have never done one minute of work in my company and I don't know if they ever will. Unlike your company I can't fire them. If you don't work, your company can just fire you. But as long as they keep paying to stay in Burnlounge they will continue to make money in my team, since I will not let others decide my fate no matter how strongly they feel about theirs. So these people in my team get bonuses for my efforts. This is not a big issue since they have to reinvest to stay active and that is where I get compensated. They will never make as much as they could and they might even consider the company a failure. But if they would just put fourth a little effort and trust, the sky is the limit, not the chair that they are sitting in.
Mark
Mark:
I'm not against the concept of Burnlounge. What I am against is the business practices of hiding details in the fine print, the unavailability of a 1-800 number for customer support, and a whole host of other misleading business practices by Burnlounge.
What the readers want to know is, how much are you making from sign-ups as opposed to actual music sales?
So, you made "several thousand dollars." Do you see that lasting over time? Especially given some of your members opting out but continuing to get hit in the wallet for something they're not even promoting?
I think it's disingenuous to take money from people who have decided not to work for Burnlounge. Maybe they thought that if they quit doing it, they wouldn't be charged, but they still are. What kind of business tactics is that? Is there a montly cap for Burnloungers who have fallen out of the proverbial fold? If you don't sell anything in 3 months, maybe your account should be frozen until you reacitivate it, instead of letting Burnlounge just keep billing your credit card to host a store that is inactive.
I think that's despicable, but then again, it's not my company.
Tony Z.
OK. This does not need to be posted. My husband ran into an old friend. This friend went on and on about the burnlounge. My husband was and is all excited about this project. He's a music lover and the computer guy in the house. I am the Salesperson.
I agreed to support him so we paid $444.40 tier 3.
I wish I had read or seen your comments!!!!!
It sounds like the only way we can make money is to be in the music industry like a DJ, Radio personal, record producer, or be part of people making music.
WE ARE NOT!! I am in Real Estate sales, so this is why I thought I could sell people on the concept of buying into the Mogul concept. I have two sons in college and they are always burning music. Some of their freinds have unlimited bank accounts so I thought we could get them to buy into the tier program. ONLY after we joined did I get all the information. I am so mad and confused. How can I try to get my money back? If there isn't a way then do you have any advise on how we can make money?
I doesn't seem right that I only make $50 when I sign someone up as a mogul.
You can get a better return selling Premier Jewlery or Tupperware. I gues I thought this was the Tupperware for my generation (30ish).
Any advice on how to get a return or sites for us to get involved in a local Burnlounge group?
Thank you Mark – At last someone is honest. Mark says "And yes! we make money from signing other people" . Also, "But as long as they keep paying to stay in Burnlounge…". Thats crazy to me and sends up a red flag. Not the Red, White and Blue flag that keeps being waved when it comes to Burn Lounge. When did it become un-American to question something thats seems like its not such a great deal. I still have not heard of anyone who made money selling music. Also, again, the i-Pod is NOT the first or the ONLY mp3 player on the market. You have CREATIVE ZEN, DELL, EPSON, COWON, ARCOS, shit, my phone (treo650) plays mp3's. Also every time a new Phone or PDA is introduced they throw in the factoid that it 'ALSO PLAYS MP3s'. On just about every site I go on where you can down load music, guess what format they offer. This makes Burn Lounge look even less attractive. I went to a BL marketing presentation in April '07 – came across this blog in September – Its been going on since at least January – here it is November and the people who are supporting BL have done nothing to show how this is a good deal except to claim they made thousands of dollars. (oh, and call people dumb.)
Sorry Jamic – the presentation was April 06' – I know how you are with details (lol)
I just signed up with Burnlounge today and also just found this site, and quite frankly from what I'm seeing in the way of negative responses here they're apprently from people who just don't understand MLM or didn't look into it hard enough before turning over the credit card. With all the successful MLM companies out there today, to say it's a bad deal for that reason alone is quite frankly ridiculous. MLM is not a "scheme".
You make money for signing people up? GREAT!!! It's a business!!! Signing people up is the direct effect of marketing – isn't making money from your marketing efforts part of what every business is about? And you're not just making the few cents per download thru your site, you're also make override income from the downloads from sites in your downline, and quite frankly with the way the MLM structure is set up, your upline is helping to create your downline too. So what's wrong with that???
What's Napster paying you? What's I-tunes paying you? How much does XYZ franchise seller reimburse you if the franchise they sold you fails? At least with a company like BurnLounge (or any other MLM), the people who signed you up have a direct financial incentive to help you succeed. Business involves risk, and this risk ain't that much… Plus they're on the way to being able to pump other products thru the pipeline, which of course means more potential profits for everyone. And if the people at the top benefit the most – FINE!!! They're the ones who took the risks in the first place, not really different from any other company.
What's wrong with it? If you read this blog carefully, you won't see people saying that Burnlounge is a "bad idea." It's a great idea, but the way it has been executed is terrible.
I-Tunes pays you about the same amount per download than you get from BurnLounge, and you don't have to share it with anyone else. The only difference is, you don't get your own burnlounge.com/yourname URL. But the upside is, over 75% of the market uses an iPod, where far less than that can download from a BurnLounge store.
My biggest problem with BurnLounge is that they come very close to walking the line between lying about this fact. In their user agreement, they say, "does not work with Apple Operating systems."
Why can't they just say, does not work with the iPod?
To me, that is clearly a violation of the public trust in your product.
My other problem with BurnLounge is that while people like you go out and sell BurnLounge stores to unsuspecting people who have no understanding of retail / downloadable music sales, where does that leave all the recording artists listed in BurnLounge stores. The goal then becomes, how many stores can I set up, NOT, how much music can I sell to the public and represent these recording artists to the best of my ability.
There's a lot wrong with what you think there is nothing wrong with. Franchises are built on the premise that there is one central system that supports a number of individuals who have taken a risk. Those individuals are guaranteed a certain amount of space between stores, so that they are not sitting on top of each other, except in certain circumstances that have to be approved by the main office. You don't see two McDonald's directly next to each other, but with BurnLounge, 37 moguls can be working the same room at a nightclub. Who do you buy from? What about customer support? What if I want to return my downloads? What if it doesn't work for me?
Many BurnLoungers have zero business experience, and once the MySpace/SnoCap partnership launches…you can say bye bye to BurnLounge, because artists won't need the application anymore, since they can then turn to their MySpace page and sell their music where the community really is.
BurnLounge, to me, is a joke. That's my opinion. While you go out and sell people on the kool-aid, look in the mirror and ask yourself, "am I doing the right thing?"
I stongly disagree with you, but I wish you could luck as you take other people's money without giving them the support they need to succeed.
Tony Z.
You're obviously entitled to your opinion, but this is why the arguments start. You don't know me from Adam, yet you're accusing me of "taking other people's money without giving them the support they need to succeed". This is based on what, our years of being neighbors??? Do you know me? And what is your definition of success?
I've been to 2 meetings total that were held by one of their bigger moguls. In both of those meetings it was brought up BY the presenter that you can't download to an iPod – so MAYBE you went to the wrong meetings.
At the top of your response you said it's a great idea, yet at the bottom you said it's a joke – I don't get that one. In any business there's good and bad – so far the ones I've met have been completely out in the open. Maybe I'm just one of the lucky ones.
Regarding future potential, they're bringing other products into the portfolio in the near future. So it won't just rely upon music downloads. That's called diversification.
Regarding competition – so what – market forces will decide when there are too many moguls out there. In the meantime I say let the adults decide on their own. While I'd agree that the growth potential isn't as great for mogul #100,000 as it is for mogul #100, there are people who come into MLM programs years after they start and still make sizeable incomes. And that sir is no different than any other competitive situation. The strong always survive – that's just business.
With all due respect, you obviously don't really understand MLM. People don't HAVE to buy makeup from Mary Kay, or ANYTHING from Amway/Quixtar, or supplements from Advocare etc. etc. – they just do, continually… The people in Burnlounge will continue to buy from Burnlounge because they're involved with Burnlounge – it's that simple.
There's no kool aid drinking here, you're just assuming there's kool aid because you don't agree with or maybe don't completely understand certain aspects of it. If it was ***JUSTTTTT*** selling music downloads, I'd be right there with ya. But it's simply not.
Okay, so they bring in tickets from Ticketmaster for Burnloungers to sell. My guess, and this is only a guess, is that Burnlounge only has access to a certain number of tickets from each venue per show, which limits the amount of tickets Burnloungers can sell. Now, after all the tix avail are gone, the splits are so low, does it make it worth it for BurnLoungers?
You're argument that I don't understand MLM is true. I don't understand it, but it's mainly in this case.
Mary Kay, I understand. You have a box of products, you go to someone's house and you sell them on purchasing the products from you for a premium price, which make the split larger and you can make a decent living if you work hard. They get products from an individual who is initially trained in how to sell Mary Kay products, and that person is supported with marketing material and strong customer support.
BurnLoungers, on the other hand, have only digital music to sell for .05 cents a track, and only 25% of the houses can play your music. Now, you have Zune coming on the line from Microsoft, which won't support "Plays For Sure", and that is going to cannibalize the market even more.
Throw all the products you want in the mix, but there are larger companies who already are highly successful at selling these products. They've built trust and customer loyalty. I don't see you being able to build trust in your customers without the business tools and money that it takes for you as an individual to support your customers.
Finally, the download market is softening for DRM downloadable music. Read any digital music news web site and you will see this. The more people you sign-up as mogul's, the less people you have to actually buy music and the more competition between moguls in a marketplace, which may have an adverse affect and hurt Burnlounge, because they can't control the marketing message of their thousand's of sales outlets.
One of these days, it will all fall onto itself. I wish you luck. Sure, you can go out and sell people on becoming a BurnLounger, but can you actually sell music?
And, how come NO ONE has ever posted here a true accounting of how much they've made of off BurnLounge in download sales? Are people scared to do that? Why?
The only thing any one ever talks about is how much money they made selling mogulships, but never how much they are generating in music revenues, or how they are supporting recording artists with co-promotions, etc…
To me, this gimmick has no legs, and I'll continue to criticize it until it goes quietly into the night.
Tony Z.
Well, the time may come when you're right – but I think you're underestimating the power of multilevel marketing. For example, to keep it legit, part of staying in consistently of the pay structure is the requirement that there be $20 worth of downloads thru your site per month. That could be via people coming to your site, or you doing it yourself. Regardless, that's a helluva lot of downloads. And remember, the downloads are generating commisisons thru the MLM structure too. So it's not just the .05 per track.
Regarding trust, MLM has trust built right in because a lot of the people involved were brought in by people they already knew. Listen, I don't love MLM by any means, but I do understand the benefits of getting into one in its early stages and have it succeed.
They also talked about adding movies, ibooks, tickets, ring tones and cell phones/calling plans and more in the not too distant future, some of which obviously would have a higher profit margin than music downloads. If it was just music downloads I would have not gotten involved. Would you have the same opinion if these other products were added?
I understand that there are some multilevel marketing companies that do very well, but their products are generally hard, tangible goods that are differentiated somehow. I'll use Mary Kay as an example, because that's one that I'm familiar with.
With Mary Kay, you're getting beauty products that are generally created by that company, with their own packaging and chemisty. It's up to each sales rep to sell people on Mary Kay as a product that is different, better and at a price point they can afford over other cosmetics. And, it's a social product, because women, who the products are mainly targeted to, can throw parties in their home and invite people over for an in-person demonstration.
With digital music, there's nothing different about downloading it from BurnLounge, from iTunes or from MTV or from Zune, et al. The only difference is, the player you play it on.
The basic premise of MLM is to have a product that you can go out and sell that is "different" than other companies products, with a product line that is constantly evolving and growing, that gives people new incentives.
Yes, I see that BurnLounge will be adding new products to the mix. That, they have to do, because if they didn't, they wouldn't have a business.
Maybe it will be successful, and I hope for yours and every other BurnLoungers sake it is. But, the market for media sales is saturated on the web. Amazon and BN.com own books, the mobile phone market is already saturated with companies that buy time on the larger networks, like Helio, Boost Mobile, Virgin Mobile and Amp'd Mobile, many of which are all struggling to compete with their larger predecessors while spending multiple millions of dollars in marketing money.
Ringtones, hard to do over the web. People buy ring tones from their phones, not from web sites. Burnlounge would have to open up a shop on the wap deck on Cingular, Verizon and T-Mobile. I don't see that happening anytime soon, because those carriers won't allow it. And, BurnLounge may not have a license from the labels to sell ringtones, so they'll have to get them from some third party, which then splits the revenues down even further.
Barry, the thing is, I work in digital media. And, I also study digital media at New York University's School of Continuing Professional Studies. I see what BurnLoungers are up against every day, because I'm part of web 2.0 and am deeply involved in creating new business models for the web. I read so many newsletters and trades, I attend events and I talk to people in the music industry every day. I've also run my own web site, been around digital music since before the old Napster, and I try to research consumer behavior. I feel like I have a good command of, but am in no means an expert on these things.
Knowing what I know about business, if BurnLounge were to refocus their marketing into more of a social community of buying and trading music with friends, if they would be honest about the fact that you couldn't play it on an iPod in their marketing material and on their web site (other than having someone tell you that at a meeting having been asked the question), and they would provide a 1-800 number for customer support from their web site…if they did those three things, I would back off and maybe even help them grow.
I can't sit here and watch a company be disingenuous to its base of sales people by writing only "does not work with Apple operating systems" in the fine print. To me, that is WRONG! That is misleading.
Embrace what you CAN'T do and tell people it's an ALTERNATIVE. Play up the fact that it doesn't play on an iPod. Are you looking for a new way to have all your media in one place? Your music, your movies, your cell phone and your books, where you can share your world of media…that would be the place to start. Make it social baby…that's what I want to see. Instead of moguls, open it up to everyone FOR FREE, and sell advertising around it.
Tony Z.
Correct me if i'm wrong – in order to stay in BournLoung you have to make $20 worth of sales per month even if you have to make the purchases yourself? Wouldnt that sort of make me like a drug dealer that buys his own product. How do I make money in that situation? Also, Again, if its not in mp3 format I dont see a market for it. And, with Zune BurnLoung's prospects look bleek at best. I was at the presentation in Manhaattan and they didnt mention anything about format.
EBZAR:
MP3 is a hard beast to beat. However, I do buy tracks from Beatport because I know I'm getting quality MP3, and not something encoded by someone in their bedroom. So, you're right, and there are many others who feel that there is a market for open MP3 format, instead of all these DRM'ed walled gardens.
Zune's launch heavily impacts BurnLounge. And, the launch of MySpace/SnoCap partnership will also heavily impact BurnLounge, as artists will then be able to sell their music through their own myspace pages and web sites, doing away with their BurnLounge URL altogether.
In some respect, BurnLounge exists for bands to use their BurnLounge store to sell their own music. All that will wash away into the night when MySpace and SnoCap come online with their platform. That will take away a good chunk of BurnLounge's users.
BurnLounge was a good idea in its essence, but they've made too many mistakes already to succeed. Viral marketing of downloadable music is a game that you need millions of dollars for and you have to compete with the players in the space. With Zune coming on board, they might take a small chunk out of iTunes, but people will be able to share their music (not sure if that's really all that important) using the WiFi aspect of Zune, and if BurnLounge doesn't offer that feature, then MS users will turn to Zune becuase its an MS-launched product with MS functionality and MS customer support.
Sorry BurnLounge…you're just not MySpace, YouTube, Napster, Real Networks, MTV or Microsoft. Those are the companies that will win the MS side of the digital music revolution. Maybe you should have launched in San Francisco, where the real venture money is, because people out there would have guided you in a more concillatory and social direction, instead of this rah-rah, let's all make money on the download revolution scheme that you've built so far.
Tony Z.
EBZAR – you're over complicating it – it's MLM, remember? So even if people are just buying the downloads themselves, they're creating true sales volume for the people in the MLM structure, thereby creating commission checks. So my purchases will be creating income for the people above me, the purchases by the people below me will be creating income for those around them, for me and for those above me etc. This is why I said a few posts ago that regardless of who's out there in the music download industry, BurnLoungers will continue to buy thru Burnlounge, because we'll be making each other money. Get it? I understand that those who are JUST interested in buying music and not the business plan could wind up going elsewhere when new things come out, but lemme ask you this question – hypothetically, you're a BurnLounger. You're making money from the Burnloungers below you who are buying downloads for themselves for the same reason. Are you going to stop buying downloads from BurnLounge and give up the potentially huge downline commissions because ABC music download company is offering a better deal elsewhere, a place where you WON'T get paid by them? THAT's the point – it's not just the .05 "from yourself", not even close.
I disagree, I think I simplified it. Also, the question was asked previously, Why would anyone come to my site to purchase downloads and not the hundreds of people around or over me. And I believe it will all be moot when artists start launching their own sites where people can buy music (I'm surprised that has not happened on a larger scale yet). Do you think it will be long before labels themselves start sites and offer their catalogues. The same way these large studios, large music (Tower Rec.) and video (BlockBusters) stores are shutting down its going to get harder for sites like B.L. to get a foot hold especially if the product is proprietary. If i cant play it on what i have then fuck that. Im not going to buy more shit. It has to be convenient. I thank the rock community for showing indie artists how building your own studio is far more feesable than pooring money into a large studio. And, technology for making it affordable. If after putting $400+ dollars down I have to keep buying music to stay in and get 100 people to buy into Mogul-ships and they have to make sales or buy music themselves in order for me to make money…… (lol) your right – its too complicated for my feeble brain. I have to pass. At this point in order for me to purchase a download from B.L. it would have to be from an artist im really feeling and their music isnt available anywhere else. It just doesn't seem worth the trouble.
Keep in mind that I'm only doing this for informational purposes – I'm not trying to sign you up.
I'm tellin ya, you're not getting it. Maybe this'll help… Using your example – if you did sign up 100 people, at a BARE minimum you would have already made $5000 on your initial $400+ investment. I say bare because the people you signed up would be signing up people too and you'd also make money from their efforts. It would likely be much higher than that. People above you would also be placing people in your downline too. Anyone knowlewdgeable in the MLM industry would know that if you yourself signed 100 people, then having a total of 200 people in your downline would be a horrible, probably impossible return. Even 500 would be low. So, we'll use 200. Out of the 100 more people your downline and upline recruited, you could make upwards of another $5000 if 50 were on one side of you and 50 on the other. So this $10,000 is before a single download has happened. THEN there's the downloads being purchased from those below you. 200 people spending $20 per month to maintain their spots and their points. 200 X $20 = $4000 in group volume per month. If you were only getting 5% of that amount in group commissions, that's $200 per month in your pocket. 10%, $400 per month. Are you telling me that you'd go somewhere else to download your music and that you wouldn't spend $20 per month to keep the $400 coming? There are probably people involved who have thousands of people in their downlines already. You show me someone who won't spend $20 to make $400, I'll show you someone who needs to be smacked. How about $20 just to make $100? How about $20 to make $5000. IT'S MULTI LEVEL!!! The people below you are not doing it to just make money for you – everybody's working to make money for everybody. Every person at the current "bottom" has the people above them helping them make money too, just like every other MLM plan out there.
If what you guys are saying regarding these soon to be super download places killing Burnlounge had any chance of being accurate, then that same premise would mean that Wal Mart and Best Buy and Comp USA and every other big box retailer would have destroyed Amway/Quixtar years ago. Instead Amway is the biggest MLM program in the world.
Maybe it now makes more sense. If not, then maybe you're just not MLM fans and don't understand the power of it.
Ahhhhh…I love when people say, you can make $5K!!!!! Woohooo!
Okay my man, let’s break that $5K down, after taxes, costs, hours worked, etc…etc… Let’s get real, my friend. $5K isn’t what you think it is. Somehow, you forgot to mention that’s pre-tax; then there’s your costs, for example rent and cell phone, and the fact that it would take you an extraordinary amount of time–akin to a full-time job–to make that 5K.
Okay, let’s use your math here and see how much a Burnlounger signing up 100 people can make per hour. Basically, if you want to break down the opportunity into dollars and cents, if a Burnlounger makes $5K signing up 100 users, how much is he/she really taking home?
$5K at reasonably average 28% Federal Tax ends up being $3,600. That’s not including state or city tax. Let’s say, it takes you on average, 5-hours of conversations with a potential BurnLounger to get them to spend the $400+ sign up fee. 5 hours x 100 sign-ups is 500 hours, divide that by $3,600 and you get $7.20 an hour.
For arguments sake, let’s say you average 2-hours a sale. That’s $18 per hour. You’re doing better, but 200 hours is 25, 8-hour days. You would have to work 25, 8-hour days to make $3,600, factor in minus your 400+, and your $240 per year buy-in to keep it going if you’re not generating $20 a month in sales.
Doesn’t sound to me like it’s a cash cow. I’d do better working at Starbucks, maybe? Not that there’s anything wrong with Starbucks. They sell good music and the even offer health insurance for PART-TIMER’s! There’s no health insurance with BurnLounge. Oh right, sorry, I almost forgot. Let’s also factor in your health insurance at $300 a month, if you don’t have a full-time job. That brings your take down even more. What about your cost of living? Food, clothing, child care? That $5K you can make anywhere, at half the resistance and you don’t have to sell.
Sales jobs are inherently risky, but the rewards should be much more than your average working salary of $60K a year, that’s if you sign appoximately 100 people a month.
My girlfriend just said to me, as we were talking about this, how many people realistically will spend $400+ dollars, plus the $240 a year to become moguls? There are only so many. Once that number is maxed out, then new-signups slow to a trickle. Once these people figure out that you can’t make much more than you could working a day job at the local Honda dealer or being a bartender at a restaurant or nightclub (which is hard work but more fun!), why would you want to kill yourself selling all day when it’s easier to just get a steady job.
Okay, so you’re a BurnLounger with a real day job, and you have BurnLounge on the side? Are you realistically going to spend the abovementioned amount of time to sign up 100 people to mogulships in a month?
And, is that the point of BurnLounge? To make everyone a mogul, buying their own music from each other? Shoot, I buy music from iTunes and on my iPod, it works for me, and I don’t have to pay anyone to get involved. I can join LinkShare, sign-up for the iTunes affiliate program, and sell all the music I want without paying anyone a dime.
Granted, I don’t have the technology to make it all integrated like BurnLounge offers, but at least I can do it from my own web site, how I want, when I want, and I have 75% of the digital music player market to market to.
Oh…one more thing. What about your costs? How much does it cost you per sub to sign up a mogul? What about cell phone, drinks, dinners, gifts? To be a salesman, you gotta treat people right. There goes more of your profit out the window.
You can’t compare BurnLounge to Amway. First, Amway is or was a much better run organization, and the profit margins are completely different. Music is a commodity you can get just about anywhere. Amway products are Amway’s. And, I think if you work for Amway, you’d get your own little slice of territory. You wouldn’t have to compete with every Tom, Dick and Harry in the same vicinity. Correct me if I’m wrong, but I think that may be the case. Plus, the profit margines on products are much better.
Your job is to sell products. Sure, if you bring people in along the way, then you get to share in their sales. But, to me, this whole BurnLounge things is about selling mogulships, and somwhere, people forgot that there are real artists and musicians watching all this going on. They are going to sour on this sooner, rather than later, because they will realize, it’s not about them, it’s about the MLM and how much BurnLounge can sucker people out of before it’s too late.
Snocap / MySpace is going to kill BurnLounge. Same for Zune, and of course iTunes.
Sorry Barry, the game your spinning isn’t worth the BurnLounge code it’s delivered on. I’d get out or you’re going to be losing money, just like the many disappointed one’s who have posted here in the past.
You JUST DON'T GET IT, BECAUSE YOU DON'T UNDERSTAND MLM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Your "100 a month" comments clearly demonstrate that. You're looking at one little piece of a huge pie. Lemme put it this way – the guy who presented it to me last week opened up his online statement, he's up over $4000 per week now after just a few months working it. The guy who signed him up is at about $12,000 per week, and he started working it just a few months before him. I saw the live statements. These guys are working no harder now than they were a few months ago, but their downlines are growing fast and therefore so are their paychecks. And I'd bet that neither of these guys have personally signed up even 40-50 people TOTAL each. Now they're out there helping their downlines do the same thing, WHICH IS WHAT MLM IS ALL ABOUT! So someone who did sign up "100 people" would almost most defintiely get to the same point and then much further pretty damn fast. It's like you're going out of your way to nitpick every little negative thing you can find or think of in your effort to talk yourself out of it via not understanding it.
I'm really not trying to insult you, so please don't take it as such – but you TRULY, TRULY don't know MLM, and apparently neither does your girlfriend. In a relatively new MLM program like this one, someone who was able to personally sign up even 20 people per month and just help the people they're signing up to just do a fraction of that has a pretty damn good chance of become a millionaire within a couple of years. That's just the way MLM is. It's always been that way, and it allways will be that way. And regarding there being "just so many people", you're right. This is going to expand into other countries – that number of people can be a million – Amway has way more than that. There are many people in this country who are multi millionaires thru MLM who are working no harder at it now than they were years ago when they started whichever one they're in. The only difference is that instead of working to sign up people on their own, they're helping their downlines do what they did. For that and that alone, you cannot beat MLM.
And also, a big part of Amway's pitch is that you can buy the things you buy every day, but instead of going to the store and making the store money, you can just do it thru them and build a sales organization to do the same.
I'm 43, my comprehensive health insurance is $114 per month. At $300, you must live in NY.
My man, you just don't understand the overall picture. It ain't just about downloads, and it ain't just about a single person signing up moguls. As in every other MLM program out there, it's about the masses working with the masses. And the people who get into MLM's toward the beginning and happen to be in ones that make it, those people tend to become wealthy. Burnlounge has nothing cornered in that respect – they're just doing what many other successful MLM programs have done. And I don't know of another MLM program out there that's capitalizing on the digital age. THAT'S why I'm in this one.
The more you speak Barry, the more I smell PYRAMID. BurnLoungs' primary function is not to sell music. Your praising signing MOGULS more than downloading music. Im gambling on people to keep putting money up to stay in and not on the public buying music and on MOGULS signing up MOGULS. All I can think of is the poor dude on the bottom whos is running into people who are not interested or are already signed up.
Im the first to wish you well – There is a sucker born every minute. I may have been born yesterday, but I stayed up all night.
Good luck. For all involved I wish them well.
Just dont laugh at me too hard when you wiz by in your foreign toys.
So again, you don't understand MLM. In any newer MLM program there's going to be an emphasis on signing up distributors. There's nothing new there. Lemme ask you this question – if the products are digital music, movies, e-books, phones, concert tickets and more, are you going to still consider it a pyramid? And my guess is that even if it stayed at just music downloads, I seriously doubt that the artists will feel offended that their music was only purchased to satisfy a bunch of purchase requirements.
Oh, and in every MLM there's a bottom, so nothing new there either. If all you can think of is "the poor dude at the bottom who can't sign anyone up", then maybe your negativity toward MLM in general is playing a part in your opinion too. You're confusing "sucker" with "someone who just doesn't understand the power of MLM". Amway has been growing for how many years now?
It doesn't matter what the products are. What matters, is the reputation and honesty of the organization setting up the MLM, and the realistic profits that can be expected from SALES of those items and not from sign-ups of additional distributors.
Artists would feel offended that their music is only being purchased by those who hope to gain from the sale of mogul-ships, than the sale of their music. The reason, you ask? Because then their music does not get heard by anyone, and there's a false sense of commerce. Record labels plan marketing campaigns around sales in a given territory. If those sales are inflated, than that's a key metric that can mean the difference between profit and loss and who their target audience is for a given locale.
Inflating the number of downloads sold because you need your own people to buy music in order to stay in the game is HIGHLY MISLEADING! If you tell me that it's not, then you know nothing about the music industry, which brings me to my second point.
Now you've got all these people who know nothing about the music industry running all these online shops, with little in the form of customer service. There is no 800 number listed (last time I checked) on the Burnlounge.com web site.
What are you suppoed to call if something goes wrong, you want you money back, etc…
I don't know, I just don't think it's too well though out. If it were me, the whole thing would have been set up completely different.
We'll see what happens.
I watched one of the online presentations today, and actually the presenter partially agrees with you that there are things that need to be addressed, and that they will be. They refer to the current version as 1.0. It ain't perfect, but I think their analogy is a good one – that neither was AOL 1.0
I don't see how it's misleading when you're told right up front that it's expected. But that's my opinion. I spoke to 2 people today who are in bands, they seemed to be OK with it, especially since I told them that they can submit their own music for free and it'll be included in the Burnlounge playlist with everyone else. In the Burnlounge sites, the owners can organize things the way they want.
At least I'm not referred to as a koolaid drinker anymore – at least not at the moment.
I have not yet watched the online presentation. I will do so and hopefully not get sick to my stomach in the process.
So, now there is some admission that things aren't perfect and that they need to be addressed. But, what will be addressed and what won't be addressed is all up to speculation at this point.
I would like to see BurnLounge clearly state that the music downloaded from the web site does not work on an iPod or now, a Zune. That must be clearly stated to anyone who wants to invest in becoming a mogul.
The next thing I would like them to do is set up a 1-800 number for customer service for both BurnLounge Moguls and consumers.
And, I would like to see them drop the $20 a month sales requirement, because this artificially inflates sales, misleading investors, the record industry and artists on the so called power of BurnLounge.
Lastly, I would like them to clearly explain the sales splits on their web site, from all products. Let's be transparent here. How much do the labels get, how much does Loudeye get, how much do they get, and then how are those revenues split downling in the rev share between moguls.
You can't hide these facts forever. If you choose to have your own, internal sales force, sure, it's proprietary information. But, when you start working with 20,000 to 30,000 people, that's different. You need to be more transparent.
Oh, and one other thing, get rid of the rah rah, techno-laden sales pitch. I think it's overhype and oversell and its what got them to this point in the first place. Now that the blogosphere has weighed in and written about the company, these people need to read what's being written about them and take some action, or we are going to continue to criticize the company for its ethically challenged business practices.
You're speaking your opinion, which you're entitled to of course. The rah rah you're referring to is part of every sales force in the country in one form or another.
The $20 per month, you know, that thing that everyone who signs up is told about before they voluntarily sign up, firstly creates sales commissions for all parties involved, and secondly gives the program the legal legitimacy it needs to be able to continue as an MLM program. There isn't a single misleading thing about the monthly requirement. How is it artificially inflating sales when money IS actually being paid? Ok, so it's either coming from someone who's just a customer, or it's coming from a Burnlounger – is the money different? Different currency? No, it's MONEY PAID.
Like I said, these things are your opinion and choice, and apparently there are thousands of people in the country who are OK with it. And make no mistake – it's gonna keep growing. That will mean more incomes generated, therefore more music purchased, and when additional products are brought into it, God knows what it'll turn into. You'll see.
Barry,
My point is, that the $20 per month is mandatory and not voluntary. This means that even if I don't want to buy music, I have to, to keep my store open, in the case that I hadn't sold any music that month. Tell me, how does this not artificially inflate sales? If you don't think that's the case, then surely you have little understanding of the music industry and how music is tracked.
Everyone knows that in the past, record labels sent boxes of CD's for free to mom and pop record stores that reported to SoundScan in order to pump up sales for a given artist. By forcing BurnLoungers to prop up their stores by buying music they may not have intended to purchase, artificially inflates the bottom line for BurnLounge. It misleads investors that consumers are actually purchasing music, unless BurnLounge breaks out stats on BurnLounger sales to themselves as opposed to music purchased by legitimate customers.
If I were an investor in BurnLounge, I'd want to know, how many new people are buying music as opposed to BurnLoungers themselves.
Why should I be forced to buy music I might not want, just to keep my store open? After a while, I may have all the music I want and don't want any more, but I have to buy it if I didn't have any sales that month.
In my heart of hearts, I believe this is an unethical way of doing business. My company doesn't ask me to buy its products to stay employed there, so why should BurnLoungers, after paying in the $400+ upfront fee, be charged $20 a month and get music. I think, they should just be charged the $20 to use the technology, and no music changes hands. That way, there is no misleading stat on sales.
Wall Street or potential suitors are not going to look kindly on a company that claims music sales of X, but in reality, much of the music sold is being purchased by a BurnLounger through his/her own account.
See…all you seem to care about Barry, is the money. If that's the your church, then by all means speak your gospel. But, where I come from money isn't everything. Ethics and moral responsibility go a long way in this country. To be ethical in business and be successful is much better, in my opinion, then being misleading and greedy.
Now, as you suggest, thousands of people in this country are "OK with it." That's your opinion, not fact. And, if they all really knew the bottom line truth, would they, after all is said and done, "be OK with it."
We don't know, but my bet says they'd be concerned that they are being misled. Not by the fact that they are buying their own music, but the whole iTunes thing. When I was at the BurnLounge even in NYC, that fact was NOT even brought up. And some BurnLoungers are even saying that there's some kind of plug-in that Apple created, which I don't believe is true. When they can't even control their own people from spreading potentially false rumors, this is a company that I think was truly not prepared for the problems that it has created for itself.
You say they "have to spend $20 per month whether they want to or not". There's just no logic to that. IT'S ALL VOLUNTARY! EVERYONE who signs up knows right at the beginning that the requirement exists. How are they being "forced" to spend the $20 per month when they voluntarily signed up in the first place? You make it look like people have guns put to their heads forcing them to become Burnloungers. We're doing this as a business opportunity, not just the social experience.
Show me ONE MLM program that doesn't have some sort of ongoing purchase or sales requirement to be able to continue making commissions. One. That's what they ALL do. That's how they continue to exist. You said something about misleading and greedy. HOW??? AS PEOPLE ARE PAYING THEIR $20 PER MONTH, THE ENTIRE GROUP IS MAKING MONEY OFF OF EACH OTHER IN THE PROCESS!!! IT'S MLM, REMEMBER??? Are you this pessimistic about everything? Maybe you're just baiting me – it just doesn't make sense that you have such a not-understanding about how this works. And Wall Street – do you really think Wall Street cares whether the sales are coming from personal purchases or sales to customers? Then you don't understand Wall Street either. There's nothing unethical about this because we know exactly what we're doing here.
So in summary, we all know what we got into when we turned over the credit card, we all know that the monthly requirement exists, so we're all voluntarily in it. We're not being "forced" to do anything. I keep saying it because you keep showing it, you just don't understand multi level marketing. Fact of the matter is that the $20 per month requirement is extremely reasonable as compared to every other MLM program I've seen in the last several years. $50-$70 in product per month is a lot more common. We're all making money off of those voluntary monthly $20 purchases (oh wait, the poor people at the current very very bottom aren't yet, so the whole program stinks, right? But they'll be making money soon too, because we're helping them bring people in also – just like every other MLM program out there).