Under pressure, BurnLounge drops MLM…finally!

In another “I told you so” moment, Grant Johnson, the new CEO and Chairman of BurnLounge , announced in a press release through the Mi2n.com music network that the company will abandon its MLM model for a more traditional affiliate model. BurnLounge affiliates will be able to participate directly in the revenue upside from the sales of music, movies, tickets and other online transactional services without having to invest high fees to use the company’s software tools.

This is a 180 degree turnaround since the company dumped Alex Arnold (a former executive of another bankrupt MLM, Excel Communications) in the face of criticism about its MLM structure and the Federal Trade Commission building a “pyramid” case against the company.

See the talk on the BurnLounge discussion boards.

What has happened here is that the pressure to grow the idea and seek funding saw Stephen Murray selling his soul to Alex Arnold, a person who only cares about profit and making money off the backs of hard working young people buying into a dream. I don’t know why anyone would go into business with this man after this debacle.

Just a month ago, I saw a bunch of job postings on Craig’s List for positions at BurnLounge, which told me that a number of staffers either flew the coup or something else was going on at the company. This caused me further skepticism.

Personally, I’m just so glad that this all finally came to light. This BurnLounge situation has really bothered me over the past year. I just couldn’t sit idle and let this company take hard earned dollars out of the pockets of people who were not capable of making an informed decision because they didn’t know how to research the companies model or get the real dynamics of the revenue split from the company. It’s really tragic, and I hope many of those people get their money back.

With the new direction of the company, I will be the first one to support the concept of free tools for affiliates to use and generate revenues from. One can look at a number of other sites, for example, iLike.com and Pandora.com to see that you don’t have to screw the little man to start a web music service. This is a good first step in trying to right the company and bring it back to life. They may have to change the name though, because the damage is done.

About Tony Zeoli

Tony Zeoli is a digital media strategist, innovator, and entrepreneur. He founded Netmix.com in 1995, which was considered by Billboard Magazine to be the "innovation and advancement of dance music on the Internet." Tony has innovated at the intersection of music and the Internet for the past thirty years as a project manager, product manager, information architect. He is also the founder of Digital Strategy Works, a WordPress web design and digital marketing agency in Asheville, NC.

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