Is BurnLounge a Ripoff?

I had a great conversation with a professional network marketer during my trip to Philly and the Jersey Shore. We agreed that the very best opportunities to make money require lots of hard work, but shouldn't necessarily involve an upfront investment. There should be a clear path to profit for anything you get involved in, and anybody waving a huge signup fee might as well be waving a huge red flag.

That's why I'm so concerned about BurnLounge. If you haven't heard of them, they allow you to build a private label music download site. Some marketers have been hammering musicians to launch custom-branded download sites, and there are quite a few major label acts with their names or logos appearing above BurnLounge-powered stores. Depending on how tightly integrated your store is, you pay a fee that can add up to hundreds of dollars per year. In return, you get a few cents for every track someone buys from your site, plus a cut of the signup fees from anyone that builds their own store based on your referral.

Naturally, debate's raging online about whether or not BurnLounge is a ripoff. The folks who got in early have been able to make some cash through signup fees from people in their downline. Folks joining now are running out of people to sign up under them. Customers, let's face it, want music that plays on their iPods.

Instead of rehashing that debate, though, I want to just look at the math. Before Lori and I left Athens, I noticed a ton of flyers encouraging musicians to sell their own music (and other tracks) through Burnlounge. I can't imagine spending a BurnLounge fee (starting at $29.95/year) just to do that, when you can sell your own music for free using PayLoadz and you can earn affiliate fees directly from iTunes for any tracks you highlight on your blog.

If you already have millions of page views on your band's website, you might find a way to make money with BurnLounge. Otherwise, I think you'll have a hard time selling enough MP3s to justify your signup fees.

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