BurnLounge

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BurnLounge, Inc. is a Delaware corporation founded in 2004, with offices in New York City. Its primary business is the BurnLounge online music store, and it is associated with Orbital Publishing, which produces printed matter for the company.[1] [2] [3] CEO Alex Arnold (formerly with Excel Communications and founder and former chairman of NuEWorld.com[4] [5]), is partners with Ryan Dadd and Stephen Murray.

Described by Gartner G2 as a multi-level marketing company, [6] BurnLounge prefers the term "concentric retail" to describe its scheme. [7] The company claims that it provides record labels and artists with a fan-driven promotional channel. The advertisement videos on each BurnLounge store, however, promote recruitment rather than music.

The music service allows customers to preview and purchase music, and chat through a proprietary client. Customers wishing to sell music through their own custom pages are required to purchase a subscription. Subscription costs vary, and consist of either an annual fee or an annual fee with an additional monthly charge. These fees only allow one to redeem sales points for BurnLounge products; participants must pay additional fees if they wish to exchange earned sales points for money.[8] The amount of compensation for resellers is not disclosed beforehand to interested parties, one must first register to obtain these details. [9] A Fortune article places the commission at five cents per 99-cent download. [10]

The company states that nearly 30,000 people have opened BurnLounge storefronts, including several major label musicians. [11] The service provides content supplied by Muze, with software provided by Beatport and SocialIM. [12] Version 0.9 of the software was introduced in October 2005, and version 1.0 was unveiled in Las Vegas on June 9 and 10, 2006. BurnLounge currently offers only music downloads, but other products such as audiobooks, video, ring tones, and physical merchandise are said to be planned.

[edit] Controversy

BurnLounge is not without controversy. People who understand how BurnLounge works generally fall into one of two categories: fans and supporters of the concept; or critics of the multi-level marketing aspect of the business:

The critics tend to focus on BurnLounge's marketing materials stressing the importance of building the network of friends and users over the actual selling of the product, a common theme in pyramid schemes[13], while the supporters say that BurnLounge store owners can make money through non-recruitment sales on their individual storefronts. Some attendees of local BurnLounge meetings report they experience high pressure sales techniques in order to obtain commitments on the spot.[citation needed]

[edit] References

  1. ^ General information name search. Division of Corporations. State of Delaware. Retrieved on 2006-07-13.
  2. ^ Contact information. BurnLounge. Retrieved on 2006-07-13.
  3. ^ Contact information. Orbital Publishing. Retrieved on 2006-07-13.
  4. ^ United States Securities and Exchange Commission (2001-10-04). SEC Files Lawsuit against E-commerce Network Marketing Company. Press release. Retrieved on 2006-07-10.
  5. ^ "Nueworld.com, more than a Web site, has its Kaua'i launch", The Garden Island, Kauai Publishing Company, 2000-05-27. Retrieved on 2006-07-10.
  6. ^ Bruno, Antony. "With BurnLounge, Everyone Is A Retailer", Billboard, VNU, 2005-08-20. Retrieved on 2006-07-10. (PDF reprint)
  7. ^ "MYSPACE+ITUNES=AMWAY. Is BurnLounge a pyramid scheme?", New York Press, 2006-02-01. Retrieved on 2006-07-10.
  8. ^ "Sell music" package descriptions. BurnLounge. Retrieved on 2006-08-17.
  9. ^ Information as listed on BurnLounge storefront sites as of 2006-07-13.
  10. ^ Tucker, Reed. "Money to Burn?", Fortune, 2006-03-30. Retrieved on 2006-07-10.
  11. ^ BurnLounge (2006-06-09). BurnLounge Launches BurnLounge 1.0 - Creating a Powerful Digital Marketplace. Press release. Retrieved on 2006-08-17.
  12. ^ Gonsalves, Antone. "SocialIM Launches Instant Messaging App For Online Communities", InformationWeek, CMP Media, 2006-06-28. Retrieved on 2006-07-11.
  13. ^ Finlayson, Gordon. "BurnLounge - Still Ripping Off Consumers?", 2006-07-19. Retrieved on 2006-07-21.

[edit] External links

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