Burnlounge In Trouble With FTC

Burnlounge, the online music retailer that promotes itself as a fans way to get involved in the music business, is investigated by the FTC for misleading consumers.

Burnlounge Gets Burnt?

One of the biggest things to hit music recently, as far as the market where i-Tunes and Napster operate, has been Burnlounge, an online music retailer for downloads. Part of the reason for this is down to the offer for normal, everyday music fans like you and me to get involved in the music business, by having a free music store and selling your favourite band's music as well as more recognised artists.

However, there was also the option of taking a more involved stance, and paying for a store, with packages starting at $29.95 per year for the basic store, up to $400 per year plus monthly site admin fees for the VIP Package. And it's these types of Burnlounge stores that the US Federal Trade Commission is going after.

Burnlounge Nothing More Than A Pyramid Scheme?

Although the premise of helping out bands by selling their music on a free store is sound, there's something decidedly odd when it comes to the next level of store. I sat in on one of Burnlounge's web seminars, to promote the service's imminent launch in Canada, and I have to admit that there was some vagueness with regards to how it all worked.

They didn't mention that the downloads aren't compatible with iPods; nor did they mention the fact that you'd only really make any money back by signing up people to open their own stores and be part of your team, as opposed to making money through downloads alone (roughly 5 cents per album sale - not really going to do much there, huh?).

FTC versus Burnlounge

It seems the FTC agrees. They want to examine the books of Burnlounge, and see where the profits are actually made for store owners, and it seems highly unlikely that it's from record downloads. Indeed, one email I recently received from Burnlounge stated that

"it's increasingly more important to maintain your BurnLounge store, and find effective ways to build a larger affiliate team. Enter the powerful, proven lead-generation system located at industryshift.com".

Yet this is another $24.95 per month on top of your existing Burnlounge costs. So what happened to the Burnlounge team helping you grow your sales, if they're so user-friendly and "in it for the fans"?

Seems like the FTC is onto something. As much as it pains me to say so, as I'm all for the fans of bands geting to help their heroes, this is something I would recommend you stay away from until the results of the FTC investigation are made public.