DRM Meets Multi-Level Marketing = Unholy Alliance!
BurnLounge is a soon-to-launch online music store, currently in beta, that allows users to build their own music stores and earn points toward purchases for every sale they make. Or, they can sign on at progressively more expensive levels and earn a commission from the sales of members they sign up, and members they sign up.
It’s founded by Alex Arnold, who has a history in the multi-level marketing arena (Lexxus, which peddles Alura, a female sexual aid, and Noni Juice, a holistic “miracle” food.) What sells more than sex and dubious nutritional supplements? Music with a big DRM chain around it, of course!
At least when a customer buys some Alura, they actually own what they pay for, whether it works or not. The Noni Juice, they’re free to pour into any glass or flask, or even drink straight out of the bottle.
Those freedoms don’t exist with music purchased through BurnLounge.
BurnLounge uses the Windows Media Audio file format, which includes a digital rights management scheme — indeed, it’s designed for DRM. So when you buy a download from BurnLounge, you’re really paying for a license to use the file — you don’t own anything.
The BurnLounge DRM licenses the following restrictions to the end user:
- Your computer and any portable music device must remain in the United States of America! And that’s only the fifty states — they’re very clear that they’re not talking about principalities or territories.
- You are only permitted to download music to a primary computer, a secondary computer, and portable music devices… and you can’t leave the country with any of these pieces of hardware if your BurnLounge tunes are on the hard drives!
- You may only use portable music devices approved for use with the WMA audio format. So… tell me what I can do with my computer, and tell me what portable I need to buy, too!
- You may not “re-digitize” the files — so no fair re-recording them into MP3 format so you can play them where-ever and however you want! That would be too much like actually owning the thing you spent money on, you see.
Sound familiar? It’s very similar to the Apple iTunes Music Store TOS; also bad.
The BurnLounge scheme is so wrong in so many ways… here are two:
First, multi-level marketing schemes benefit the people on the top the most, which means that many people will shell out over four hundred bucks to become a “Mogul” of this service and never get that money back. They call these “pyramid schemes” because the few at the top benefit from the labors of the many at the bottom. Unless you’re a close friend of one of the founders, well, you’re not at the top of the pyramid… or anywhere near it.
It’s very telling that in the presentation (good luck waiting for it to download) for their product, the words “multi-level-marketing” are very carefully never used. They call it “direct sales.” However, they’re not afraid of trotting out the success of such scams ponzi-schemes programs as Amway and Herbalife as postive examples of how BurnLounge can work for you.
Second, digital rights management is doomed to failure in the long run either by emulation techniques that fool the technology, or by simple user abuse. Even the guy who (with good intentions) recommended BurnLounge to me advocated a method to bypass the WMA DRM restrictions. And sure, anyone can get around DRM with a little technical hoop-jumping. But you should not have to break licensing agreements (and quite possibly the DMCA laws) in order to use music you paid money for!
Are you allowed to restrict BurnLounge in how they spend your money? Can you tell them they can only buy things in the fifty states of the United States, or only shop at certain stores? Of course not.
The music business is dying because of short-sighted, backward-thinking policies and attitudes that are driven by terror that stems from the loss of control of a medium of expression. BurnLounge, MLM evils aside, could have taken a leap into the future by creating a service that embraced a DRM-free, positive, niche-driven paradigm. Instead, they sided with the moribund music labels, because in the short term, that’s where the easy money is.
Shame on them.
Stay away from this. Support music (and musicians) that trust you. Return that trust by paying for their music if they ask you to, and by not distributing their music if they don’t want you to. Build relationships by getting closer, not by erecting walls and establishing restrictions.
Update: If it swims like a duck…
11 Responses to “DRM Meets Multi-Level Marketing = Unholy Alliance!”
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I decided to give burnlounge a try for selfish reason.
I am an artist and I want to get my music to as many people as possible…and with burnlounge I have that opportunity.
And as an added bonus I can help others achieve their dreams and make new friends and money and contacts along the way!
If you live in Alabama and want your own store or want to be part of a great team…. mail me @ Familyauc@hotmail.com.
You can also contact me if you are an artist and you would like to have your music on several sites.
Maybe I can Help!
Mark
205-935-5170 or 205-412-5814
Hi Mark. Thanks for the comment. I have to give you credit for audacity — pretty gutsy promoting your own BurnLounge site in a post that lambasts the company for being wrong-headed and bad for music and musicians.
Unfortunately, the link you posted to your personal BurnLounge site went to the default page… it wasn’t personalized, and I didn’t see and music from anyone but major label artists advertised, so I edited it out.
I’ve left your e-mail and phone numbers intact, though. That’s pretty bold, too… as ill-conceived as BurnLounge is, I hope you get genuine interest and don’t just end up on a bunch of spam and telemarketing lists…!
Hi Matthew,
Like Mark I think BurnLounge is a great thing! We pay the artists more per download (50-70%) or 50 cents to 70 cents per download than they get with their label!! If they don’t have a label, then they can put their music up and we’ll pay them as well. That is huge and we have gotten several local artists involved in the Austin, TX area. They think it is great and so do the following:
Check out hootie.com, godfatherofsoul.com, Diamond Rio, Ted Nugent, Joe Ely, Willie Nelson.
These are people that have become retailer with burnlounge to increase their sales with a great digital sales opportunity. I bet they had their attorney’s look into this before becoming involved with BurnLounge. Nothing wrong with riding a wave that is inevitable. CD’s are going away and musicians know it. Why not pay people to sell music- which discourages pirating by the way!!
James Brown is going on tour and taking BurnLounge with him. This is the first year he did not get an advance from his record label. Well he is using BurnLounge to help promote his music at his concerts.
My site is UnCageMe Maybe you should investigate it a little more before you totally bash us. I did not come in at the ‘top’ and am making some money doing it. Not lots, but I’m just getting started.
Thanks for allowing us to share our side too ; )
Holly
UnCageMe
support parrot rescue by downloading your music here…
Hi Holly — thanks for your comments.
Believe me, I investigated BurnLounge in depth before writing my post criticizing their business model. I viewed every available page of their site, sat through the recruitment video, and dug up information on the background of the founder, multi-level-marketing entrepreneur Alex Arnold. Please re-read my post.
Also, let’s be clear, here: I’m not “bashing” you. I appreciate that you’re looking for ways to raise money to rescue parrots. Looking at your site, I notice that you’re also a distributor for NuVante, a health care company that also uses multi-level-marketing to support its business model.
My problem is with BurnLounge. I’ve detailed my issues with them in my original post.
I also appreciate that you’re interested in supporting independent music. However, you mentioned that several artists in the Austin scene support BurnLounge, but the links you provide are all for artists who either now or in the past chose to endorse the status-quo, RIAA, major-label paradigm. Even your own picks on your BurnLounge page are mostly on RIAA-supporting major labels (EMI, Universal, Epic, Time-Warner, ATO.)
I’ve been an active and steadfast supporter of the independent, DIY ethic for twenty five years, both in my own career as a musician and writer, and in my advocacy of others who reject the dying major-label infrastructure. Implicit in my dedication to independent art, I reject companies that disrespect the relationship between artists and their fans.
If you re-read my post, you’ll see that my biggest issue with BurnLounge is their decision to use a digital rights management system (the Windows Media Audio format.) DRM restrictions mean that customers do not actually own the music they download — they are leasing it. See the bullet points in my post for some of the many reasons DRM (and BurnLounge’s implementation of it) is so wrong. I encourage you to do a Google search on digital rights management and research why it’s bad for creativity, bad for artists, bad for consumers, and bad for innovation.
If you’re interested in being affiliated with a music store that actually sells music downloads with no restrictions and no digital rights management and the ability to play songs on any device… a company that embraces and supports independent music as a priority… I strongly encourage you to check out eMusic. While there’s no multi-level-marketing structure, they do offer an affiliate program that pays you every time someone signs up for a free trial… even if that person doesn’t continue with a paying subscription.
I support eMusic because they match my ethics as an artist and a music lover. Give it a chance, and you will truly show by example that you really do support independent music with no caveats or restrictions.
And you can still raise money for the parrots! :-)
Appreciate the insight. Like any new company there are going to be growing pains. Formats will be standardized over time. Also, not sure what you mean by not owning the music. I bought many CD’s in the past that become scratched, lost or stolen. With Burnlounge, you have 5 cd burns, and unlimited downloads to portable units…mp3’s. As the acceptance of downloading music,movies,ringtones…yes people do pay for ringtones….not sure why..but in any case it is coming and will continue to grow. I think this good and good for the entertainment industry….burnlounge is allowing fans to become brokers for the music and not have to steal it. Which I believe is not only illegal but may piss off the artists as well….I don’t believe many are in to free music as it cuts into their livelyhood. My 2 cents…as well as being a promoter of Burnlounge. Changes are inevitable and burnlounge will continue to adapt as the money behind it dictates….oh like Sony/BMG, EMI, Warner, Universal just to name a few.
Thanks for your comments, Mark.
Regarding your question about not actually owning the music you “purchase” from BurnLounge, here is the clarifying portion of their Terms of Service:
“All downloaded music… (”Digital Downloads”) are sublicensed to Consumers and not sold, notwithstanding the use of the terms “sell,” “purchase,” “order,” or “buy” on the Site…”
You are purchasing a license with some pretty substantial restrictions (including only using the files on computers and portable music devices located in the United States.) Also, you’re not getting MP3s, but WMA files, which only play in certain devices (not iPods!)
I’m all for fans becoming brokers of music — but using restrictive technologies and digital rights management to restrict the use of music for which you spend money is wrong.
Please don’t assume that I am not a supporter of compensation for musicians and other artists. Stealing music is wrong.
You mention record companies that are the “money behind” BurnLounge. These are precisely the forces in the music industry that are not interested in changing — see the recent Sony rootkit controversy, and of course there are the innumerable strong-arm lawsuits filed on behalf of these labels by the RIAA.
If you really want to support artists by affiliating with an online music store, you should look into eMusic.
eMusic works on a subscription model. And when you download songs from their site, you are downloading MP3 format files — universally compatible with all portable music players, computers, operating systems, and mobile phones. The songs you get from eMusic are also free of all digital rights management restrictions. You can play them anywhere, as often as you like, in any country, and put them on as many CDs as you like.
Online music is growing. It’s just not going to grow in the direction the major labels, the RIAA, and partners like BurnLounge and iTunes think it will. BurnLounge uses philosophies that represent the past, not the future, of the music industry.
For a spirited discussion on both sides of the BurnLounge debate, check these out:
http://www.digitalmusicnews.com/blog/310
http://digitalmusic.weblogsinc.com/2006/06/16/burnlounge-sell-digital-music-snakeoil/
I signed up to burnlounge 2 days ago thru someone i picked from the main site, to see all it has to offer. As a young business owner for 11 yrs since the age of 18.
After singing up and being able to see the full model comp/info/bonuses/requirements and tools etc… to budget and plan my promotions as with my other businesses.I instantly noticed every MOGUL (store owner) must BUY or sell 2 albums ($20) per month to keep my 1st lv commissions and this doubles every level. So to get my full 6 levels i would have to PERSONALLY buy or sell 24 albums per month $240 meaning my team would have to do the same. WHAT! this is after paying 36.90 startup. 29 first year 6.90 a month.
taking into account i only make 5 cents off every sale 2.20 from $240 a month does not make since but after paying im locked in and they have already made a profit. There is no way to profit even if 1000 people was under me for the simple fact that if everyone in the world had a burnlounge and there where no one else to sign up do you think i could still make money no becuase i would still have to buy 2 albums a month with everyone else buying from there own burnlounge for $29 A YEAR even without the mogul package business package. meaning a total falling chain reaction with alot of money being lost.
So sad as i bought a song from my own store mad 5 cents and i could not play it, burn it, or convert it without the microsoft WMP 10 or 11 and devices. i recommend if you truly want to own your own store with no hoops to do every month and keep 100% from your direct sales and 50% from all other sales from the network. Follow us burnlounge dropouts or soon to be. go to ROCMP3.COM/MP3.
Ill put my money where my mouth is on this. they only make 6.90 month and ONETIME $15 startup NOT YEARLY all in mp3 format uploaded from the labels and artist themself. 100% split you and me and good luck everyone and live life money is just reserve notes they dont let us cash in while they lower the value of it (a little truth) i bookmarked your page and i already us firefox :) and help save the internet. thanks
I checked out rocmp3.com — it’s great that they’re offering pure MP3 files, true.
Unfortunately, based on the music available at your store, Michael, they seem to have almost no content — and the content that is there is almost exclusively in one genre. If you’re a hip-hop / R&B fan, rocmp3 might be for you, but if you have eclectic tastes, you’ll run out of things to buy pretty quickly.
Finally, it should be noted that the company charges $10.95 per month to have a music store, not the rate you mentioned in your comment.
Finally (and this is the strangest part) I could not find a sign-up form on the company’s site. They won’t get too many members that way!
WOW your post cracks me up. Looks like you’ve got the whole burnlounge thing figured out, not to mention life itself. Its seems like sure have spent a WHOLE lot of time and energy looking and talking about burnlounge probably more then me and I made a six figure income with it this year on the side of my mortgage company. You seem to be a person that tries to look like you have all the answers, by these very analytical blogs you write, while correcting other people that respond to them. But in real life your just a guy with all the answers and NONE of the money. You can always tell a tree by its fruit! On the timing issue your exactly right mlm are always about getting it at the begging, so your in Luck we just got out of beta in june this is still the beginning! What you didn’t think of is not everybody gets involved to be a millionaire and even if all somebody ever made was 1000 dollars it would still be worth a 400 dollars investment! You have to admit this sure does blow the typical mlm- someone buying thousands of dollars of over priced nutritional products, household goods, cosmetics or legal services then convincing them to go sell it to there friends and family or even on the streets. Mlm’s are usually about an overpriced product to pay multiple levels of people. The same 99cent song or 9.99cd at Itunes is same 99cent song at burnlounge. I have been in network marketing for over 15 years now this is the 3rd company I’ve build. I made over 8million dollars in the industry and can honestly say. This is the biggest mlm company you will ever see, whether you like burnlounge or not. This company will enroll more members then any company ever thought about. All we have to do to go international is flip a switch. We don’t have setup shipping warehouses and corporate offices in every country. Wait till 2.0 is out in 07 then were not just music we will be dvds, video games, books, ringtones, norton antivirus, microsoft prod ucts. A total ones stop shop for digital media. So yes your exactly right Burnlounge is just a shity company its never going anywhere, it will never be anything we are just trying to scam everybody, We are all wrong and YOU Matthew are right, you are always right and have the answers to everything. We are such idiots for thinking other wise. Since your so business minded and experienced will you please enlighten us with your wast investment knowledge on what we all should do with or 400dollars and what business ventures we should look into. Thank you O knowledgeable one
Thanks for you comment, Justin. I’m amazed that people continue to comment on a post I wrote eight months ago!
You post was a little difficult to read since it was all one paragraph and had several spelling mistakes, but I try to answer all comments, so here goes…!
You wrote that I seem to have “the whole burnlounge thing figured out, not to mention life itself.”
Well, I have opinions about multi-level-marketing, and I have opinions about digital rights management schemes. I made those opinions clear in my post, and in my subsequent comments to others, I hope.
As far as life itself… on what do you base that statement? Certainly not my post, since I didn’t address life in general.
I didn’t really spend a whole lot of time studying Burnlounge, back in April. I explored their site, I watched the video, and I read their terms of service. I researched the founders, since if I was going to get involved, I’d certainly want to know who I was working for.
I’m sure you did at least as much due diligence before you became involved with them — didn’t you?
I’d like to address a comment you made about me, personally:
“You seem to be a person that tries to look like you have all the answers, by these very analytical blogs you write, while correcting other people that respond to them. But in real life your (sic) just a guy with all the answers and NONE of the money.”
By saying “you seem,” you admit that you’re just expressing you opinion. You’re entitled to you opinion, of course, and I respect it enough to include it on my blog, even though I perceive you have a negative opinion of me.
Also, if you read through the comments, I’m not correcting folks — we’re having a discussion — and until you, no one chose to personally attack me.
I wonder why, Justin, you find it necessary to adopt an aggressive and personally insulting tone in your comments? Does my blog threaten you in some way? Perhaps you’re concerned that people will read it and decide not to enlist in your downline with Burnlounge?
I also wonder how you can present unverifiable predictions as facts:
“This is the biggest mlm company you will ever see, whether you like burnlounge or not. This company will enroll more members then (sic) any company ever thought about.
Not sure how you can predict how big Burnlounge will become, unless you have a time machine… and how can you say they will enroll “more members then (sic) any company ever thought of,” without being psychic?
You also wrote, “So yes your (sic) exactly right Burnlounge is just a shity (sic) company its (sic) never going anywhere…”
I’ve reread my post, and my comments, and I can’t find where I wrote that Burnlounge was a shitty company, or that it was never going anywhere.
You mention my “vast investment knowledge.” Thing is, I never claimed to have any.
Please don’t misrepresent me, Justin, all right? An argument is weakened when the person making it has to resort to sarcasm, distortion, and misrepresentation.
If you’re making money with Burnlounge, that’s great. It’s a choice you’ve made, just as I made a choice to speak out against Burnlounge for their use of a platform that depends on digital rights management. My choice doesn’t hurt you — why do you find it necessary to be hurtful in your comments?
Again, it’s amazing that this thread is still drawing comments..! And again, thank you for your own contribution to the discussion.
Well RocMP3.com is still in pre-launch stage and will not overcharge like burnlounge. Plus way more reward from sales and building your team.
Rocmp3.com launches Jan 07