Someone named TJ (Teresa) Searcy was kind enough to have invited me to attend a BurnLounge function here in Memphis on Wednesday night at Holiday Inn Select – 2nd Floor Ballroom 5795 Poplar @ I-240, Memphis on Wednesday, May 23, 6:30pm. After receiving the evite, I responded that I might be attending. I got frustrated with her emailing me the same evite repeatedly (four times in 12 hours). So after I had already responded saying I might attend, I did some research that I think people should check out. You see, folks, BurnLounge is a giant scam and they’re using some big names to try to convince you that they’re for real.

Memphis is a city filled with individuals who make art desperate for a chance to earn a living from their art. BurnLounge being a giant pyramid scheme, what better place to take advantage of people’s greed and ignorance than the city where stands a giant pyramid as a looming suggestion of how easily people can be manipulated. Everyone around here is desperate to make a buck, so who better to use as “marks” in the scheme than your own friends and family (or people who dream of making money on the internet)? When you see “Justin Timberlake Enterprises” and “Elvis Presley Enterprises” as people included in their “store owners”, you might be able to suspend your disbelief long enough to pay the fee to, as you would be led to believe, sell music. Nothing could be further from the truth.

The Fine Print (or what the hell is wrong with these people):

1) BurnLounge uses interchangeable language to sell you on their “store owner” concept. People are led to believe that they can sell music through their store; however, BurnLounge’s financial schematic doesn’t really revolve around sales — it revolves around what all MLM’s revolve around, signing people up under you as “store owners”. They use the language of the music industry as a ply to get you to come on board and be involved. If you replace their references to the music industry in their pitches with any other industry — vitamins, time shares, cleaning products — you will get the exact same pitches used by notorious MLM’s like Herbalife, Amway, and many many others.

2) Up until recently, the format of the songs you could purchase were only good for people who are running Windows and are using Windows Media Player. No brainer, it’s not a tech-savvy site because, think about it, they don’t care if you sell/buy anything or not. Even though they now sell MP3′s, it changes nothing. The reason they made this change was to continue to look like they are “developing strategy” when, in reality, they’re just changing their tune to fit the model.

3) The only way someone can find your “store” is to search from within the BurnLounge interface — there are no direct links to your store that you can give to people, you can’t find your store in Google by searching for it, and you have to email people to get them to join you — which fits directly in line with the MLM model. Edit: They have direct links to stores enabled now and people have dedicated sites that merely redirect you to their BurnLounge stores.

4) Most Many of the songs (it is widely reported) are horrible quality, don’t work on your iPod, and/or are off-brand versions of the originals – and if you email their support team about it, you will get slow or no response to your issue, something you don’t find happening with iTunes. Among these many versions you will find many karaoke versions of well-known songs, instrumentals, and the like. Why is this? Because they’re not actually making the partnership deals with the major labels that they promise they are. The labels are all hip to what BurnLounge is and are unwilling to license their premium content to BurnLounge because of what it is: a top-heavy scam.. Edit: Major labels do license their content to BurnLounge, however licensing agreements are not the same as partnerships.

5) Representatives use misinformation to get you to buy-in to their plan. I have been approached by more than one person with a BurnLounge store who repeatedly denies that what they are doing is in any way a pyramid scheme. If you look at their model and what it is, there is nothing else that it can be.

6) You can make money, but not necessarily from sales of yours/other people’s music. You can make money either by signing people up as store owners or by selling songs. The primary method of generating income (as with all MLM’s) is how many people you sign up underneath you. Edit:You may have to complete a “sales quota”, but this is only so that you maintain a regular financial contribution to the downline.

7) They are quick to tell you about their affiliations with celebrity names in order to get you interested in making money with them. What they don’t tell you is that these people are all top-levels on the pyramid and you, who end up on the bottom rung of the pyramid, are not getting the same residuals as Rick Dees, Shaquille O’Neal, MC Lyte, Ted Nugent, and the others whose names they throw around. See, those people have thousands of contacts to place in their own downline. If you don’t, then you don’t earn any money.

This is network marketing that attacks the very fabric of Memphis’ music underbelly, manipulating and feeding on the hopes that you’ll get some mailbox money for your work as an artist. There is nothing I can say to you to make you stop what you’re doing, Justin Timberlake (why is Futuresex/Lovesounds is all but absent from BurnLounge even though you have a store?), but know that the Federal Trade Commission is keeping an eye on BurnLounge even though they’re trying to now manipulate people into believing their site is another social networking site for music fans in yet another attempt to create new marks for your so-called business.

Detractors say, “What’s your problem, E.J.? Are you against making money?” I’m all for making money in the music industry through doing what you’re supposed to do: making good product. If you agree with me, perhaps you should show up to this function and ask the tough questions like “Who do you think you’re fooling?” I’m all for competition with iTunes, but this is not the model, not the way, and not a smart investment for anyone looking to make a living off of their own music.

Additonal Reading:

BurnLounge is doomed to failure @ Puramu’s ITtoolbox Blog
Everything Just So
Flutterby
Wikipedia Entry on BurnLounge
Google Search for BurnLounge scam

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