BurnLounge Gets Burned, and I'm Relieved

BurnLoungeBurnLounge is basically the Amway of digital music.  Its customers run digital music stores and make money in one of two ways:  1) selling music downloads, and 2) recruiting other people to become store owners. 

This kind of business model resembles a pyramid scheme, since it's virtually impossible to make back the annual $29.95 to $429.95 fee you pay for a store by selling music downloads alone.  (You only earn something like $0.05 per download, requiring 1000s of sales)  The FTC seems to agree, and recently asked the Central District of California court to shut it down.

I can't tell you how relieved I am that I turned down a BurnLounge job offer last year.  The pay was good, the job involved digital music, the company was a profitable startup...but something wasn't quite "right".  As with Amway, a vast majority of their revenue came from recruitment; digital music was just the hook.

The company founders actually seemed like cool guys.  I believe they had no melicious intent.  But still, when you make promises of wealth to consumers ("Own your own store!") which consistently fail to deliver, there's a little sketchiness going on.  Hopefully they'll find a new model to follow.

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Comments

It's nice when you get confirmation that a tough choice you made was the right one, isn't it? Kind of like being able to go to the walkthrough of a really tough game you're playing to make sure you don't need to go back to your last save.

Also, congrats on reaching the point in your career when you can choose jobs based on things other than an immediate need to eat. That's also a very cool realization when it happens.

Thanks -- very, very true. It did feel good to be somewhat justified, sort of like the world saying, "I told you so" for me. :)

i got into burnlounge last year and after a couple of months, i realized it was a mistake. i canceled my account and it was a great decision. i still "burned" a couple of hundred bucks into it, though...

Yeah, man! It is sooo great that you did not take that job! Who wants to be a Mary Kay or Amway whatever of the music biz? You were smart!

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