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3/09/2006

MUSIC BUSINESS: BURNED OR BORN AGAIN?

Burnlounge is a novel approach to music distribution and marketing based on consumer empowerment and reward: After signing up in minutes, paid members of Burnlounge set up on-line searchable digital music stores stocked with music they choose. And the best part? Members make money from every download sold.

The downsides to Burnlounge are myriad though. For starters, it requires Internet Explorer - not a technologically forward-thinking move likely to be popular with it's forward-thinking target audience. Secondly, the catalog of music available while Burnlounge is still beta is miniscule in comparison to other catalogs from digital music powerhouses like Rhapsody and iTunes. And indie music is, as is the case with it's competitors too, left out altogether.

But Burnlounge is doing a lot right. And it's serving a purpose in the evolution of the music business I believe. It's the ghost of music future. It is sending a message to Nashville, LA and New York that consumers are willing to work for labels - marketing and selling - if they're rewarded for it. I hope my friends in the music business are listening: Some rabid music fans happen to like money so much that they will do whatever is necessary to make you money if you'll just share a little with them.

Instead of listening though, labels are in a slugfest with Apple over royalties for iTunes and other issues and have threatened to deny Apple permission to sell their wares in Apple's popular music store in the future - denying fans a service they apparently love. And, in another short-sighted move, labels like Warner are starting purely digital labels: Labels signing a plethora of artists who then release "clusters" of two or three songs every few months to the company's on-line store.

It's more of the same old me-first thinking that contributed to industry shortfalls in the first place. A plummet in service quality and musical quality. No profit participation for fans. No collaboration by fans. It's still the "Just buy what we're selling and be happy" model we consumers have already rebelled against.

Burnlounge has preached, "Share and you'll make more." The organ is playing. Softly and tenderly the future is calling. Every label head bowed and business textbook closed. What will you choose today Mr.Music Label President? Will you get burned by your own worn out selfish ways once again? Or will you be born again in the likeness of Burnlounge? Consumers will serve you when you serve them. That's the truth. The truth that will set you free.

3 Comments:

Anonymous Jon Haarstad said...

Excellent article. I came across Burnlounge recently and it looks promising although the IE only approach is a huge mistake I hope they correct since the more savy online users (sorry IE users....get a clue - or just download Firefox) browse using what I call the Anything-by-IE Approach. On the issue of the music - it's amazing to me to see so many steps being taken backwards when all it takes is some visionary sight forward...and there is money to be made. There is a major shake up that's been going on for awhile and we'll see who's left standing when the dust settles. It may surprise a lot of people. Keep up the good work!

3/09/2006  
Blogger Seth Ward said...

nice. love the label invitation section.

seth

3/09/2006  
Blogger indieheaven said...

theres erronerous info in this article.

BurnLounge has been ingesting indie material at an amazing rate with their "Ignite" program. They have over 2 million tracks.. about the same as i-tunes.

BurnLounge works best with IE6, but I use Firefox and it works fine. BurnLounge uses Windows Media Files because of the DRM.

Currently, PC users outnumber Apple users 9 to 1.
WHAT IS BURNLOUNGE

Burnlounge Entertainment Group is a music & entertainment company founded by Alex Arnold. Launched in mid-October 2005 out of Los Angeles, California with additional corporate offices in New York City, Burnlounge has a corporate strategy that includes international expansion into 50 countries over the next 20 months and intends to become the most powerful entertainment-based affiliate program in the world.

With a passion for the music industry and and while representing independent artists, Alex Arnold quickly learned that without a means of distribution in the music industry, despite the talent, most independent artists would go nowhere. That is when he developed the concept for Burnlounge. 36 months ago, Alex Arnold came up with the idea to mesh the power and viral growth of a business relationship model with the music and entertainment industry. This model would allow independent artists to promote their music in a viral community of people and create income. The model would put the music and entertainment industry into the hands of the true fans—the consumers. He shared the idea with Rick Dees, of American Top 40, who wanted to buy the company and develop the concept, and later became the #2 shareholder in the company. Knowing the concept had "traction" in the music industry Alex moved forward and in mid-October 2005 the company was launched in the United States.

Through the Burnlounge proprietary software, music fans can use simple point-and-click technology to build their own fully functioning digital download store. These stores can not only sell the music selected to be featured, but also allow visitors access to a vast catalog of titles from all of the major labels and hundreds of independents. By allowing fans to profit from recommending their favorite music, Burnlounge believes they can revolutionize the way entertainment products are marketed. Burnlounge is designed to provide a fun and exciting experience whether you’re looking for a part-time hobby or a serious business.

Burnlounge is built around the belief that there is nothing more powerful than a personal referral. When someone you trust recommends something, you are more likely to value that recommendation. That is what’s exciting. MUSIC & ENTERTAINMENT is perhaps the one medium that connects more people than any other. By allowing highly motivated fans to profit from recommending music they love, books they thought were a good read, or a can’t miss movie, Burnlounge can create a powerful sales engine for music and entertainment products that never before existed. *Burnlounge currently offers music, but further entertainment products such as movies, ring tones, logo wear, TV shows, audio books, concert tickets, MP3 players, etc… will become available through your Burnlounge store.

WHERE BURNLOUNGE IS NOW

TECHNOLOGY
After nearly 3 years of development, Burnlounge has released the Beta version of its service. The Burnlounge technology platform is built on 4 separate systems:

1) The FRONT END, which consists of the Burnlounge storefront and the point-and-click Independent Content Editing (I.C.E.) technology.
2) The CONTENT DELIVERY SYSTEM, which provides millions of licensed music titles to consumers through a digital computer file.
3) The unique BUSINESS MANAGEMENT SYSTEM, which provides the back end tools and management systems necessary to market, track and operate your Burnlounge business.
4) The universal INSTANT MESSENGER tool called Bonfire, developed by partner GTV, which allows retailers to communicate with customers, communities and other retailers on all current I.M. services.

The complexity of the individual systems is matched only by the complexity of linking them together. The Burnlounge development teams worked tirelessly to design and implement the initial launch of the current technology. They are now focused on refining and improving the services as they analyze the feedback from the Beta launch.

CONTENT
The Burnlounge catalog of music continues to grow. Burnlounge has acquired licenses from all 4 major labels (Sony/BMG, Universal, EMI and Warner Music Group), as well as hundreds of independent labels. And the process is continuing as more and more independent aggregators and unsigned artists hear about Burnlounge. Burnlounge has developed an A & R team to identify desirable content still not included in the catalog, and to manage the process of licensing recordings from unsigned artists. Every day, the A & R staff receives more requests for licenses. Also, negotiations continue with independent music aggregators, IODA, The Orchard, Iris, DRA and others.

MARKETING
Burnlounge has a unique approach to marketing. Rather than spending millions to promote its own brand, Burnlounge focuses on creating high quality, customizable tools for individual retailers to promote their OWN business. Burnlounge retailers have the ability to create their own teams of retailers and profit from the music sales at multiple points of distribution.

This marketing approach has already proved effective. In the first week of the Beta launch, Burnlounge took in over 2,000 independent retailers and generated revenue of nearly $750,000.

WHERE BURNLOUNGE IS GOING

Burnlounge is just getting started. Burnlounge version 1.0 only scratches the surface of the Burnlounge software’s capabilities. The development team has already begun to build a significant infrastructure to support the future updates. IGNITE DIGITAL MEDIA is the content delivery/ingestion system. Burnlounge has hired Roger McAulay, the architect behind LodgeNet and eCast, to build the software and hardware systems necessary to create an efficient, reliable system to deliver content to each retailer’s customers. IGNITE will begin by ingesting and delivering the content licensed from independent music licensors. In addition, IGNITE will manage the development of future iterations of Burnlounge’s technology.

Burnlounge is moving forward with an aggressive content strategy. It is the goal of BURNLOUNGE ENTERTAINMENT GROUP to develop the largest catalog of rare (out of print), underserved (niche genres), unsigned (artists without a label) and geo-specific (styles specific to other countries) music in the world. Burnlounge has engaged several consultants to develop relationships with content owners and aggregators in Japan, Korea, China, The Philippines, Australia, New Zealand, The Middle East, South America and Western Europe. Because Burnlounge enables fans to promote the music they love, we believe that making this geo-specific content available creates a new retailer base among foreign nationals who currently live in the United States.

Finally, the technology development of the next version of the Burnlounge platform will begin in earnest over the 1st quarter of 2006. While the Burnlounge Version 1.0 is currently browser-based, by summer of 2006 we’ll shift it to a desktop application. The new application will merge all elements of the service into one seamless client. BURNLOUNGE VERSION 2.0 will be a download manager, music organizer, music player and have the Burnlounge storefront, I.C.E. and B.M.S. accessible through a built-in browser. Future versions will integrate the Instant Messenger tool and allow retailers to create their own radio podcast programs through a new technology called BurnCast. BurnCast will allow retailers to pick the music they want and drag it into a timeline. The system will then organize the playlist and automatically insert advertising. The system will then track the number of people listening to the program and advertisers will pay according to the size of their listenership. Burnlounge calculates and pays all appropriate royalties, and shares the remaining revenue with the retailer who created the program. In the not-too-distant future, BurnCast could also be used for television and film content.

Burnlounge also plans for steady international expansion. Obviously, the US and Canada are just the beginning. Japan will likely be the next market. Japan has the highest ratio of direct-selling, home-based businesses per capita in the world. The international expansion strategy, while aggressive, will also be timely and deliberate.
============================
BURNLOUNGE VISION

In the first month, Burnlounge did $1 million in sales. What does that mean and who knows about this? It means you are looking at the next Blockbuster of the music and entertainment industry and you are hearing about it FIRST! While we are beginning with 99 cent songs and $9.99 albums, mirrored to iTunes, we will incorporate ring tones, logo wear, TV shows, movies, digital playing devices, etc... beginning in 2006.

Who knows about this? Very few! We are in the soft Beta launch of this company as the corporate team continues to modify and update the model. However, if you are receiving this, you are privileged enough to participate in the launch along with just under 7000 (as of 12/25/05) people in the world. That number is expected to grow to 3 million in as little as 2-3 years. The hyper-growth we are seeing is because Burnlounge has a binary team-building compensation model that allows you to build teams that build teams that build teams, etc…. You have the chance to capitalize on this concept and take advantage of the timing. By participating NOW in the development of what will be the largest network of digital content retail stores in the world, you can create residual wealth.

THE MODEL

Burnlounge combined (3) powerful industries:

1) The music & entertainment industry (Sony/BMG, Universal, Warner Bros, EMI) the companies that are considered the "majors" in music and entertainment. Burnlounge has partnered/licensed with the largest record labels in the world to sell their catalogs of music online.

2) The affiliate marketing industry (Ebay, Yahoo, Amazon, etc...) where people of common interests buy, sell and refer products, goods and services through a commission based network.

3) The network marketing industry (MLM, Direct sales, Network Marketing, etc...) where history has PROVEN that a monetized free enterprise system will create a powerful distribution channel providing income opportunities with various products.

WHY EACH INDUSTRY?

1) Music and entertainment are universal products that reach everyone. We don’t have to carry inventory or change a buying habit. We will never have to convince someone that they are always going to buy music, read books and watch movies. (All products that will be available through your Burnlounge store).

2) Affiliate marketing is a powerful means to distribute products. For example, on Ebay, my wife buys/sells high end children's clothes and shoes online with other women of similar interests throughout the world. Relationships and common interests are powerful. Everyone would agree, personal endorsments and recommendations are more powerful than advertisements.

3) Network marketing and business relationship models work! There is not a faster way to grow a distribution channel than through the power of relationships. What is more powerful? iTunes paying $35 million in print ads and TV commercials or Burnlounge paying $35 million to thousands of LIVE voices who have personal influence and relationships!

CORPORATE GOAL

To become the largest, most powerful, digital content distribution channel in the world. To do that, they have partnered with the entertainment majors, implemented an affiliate marketing model and compensated people (you and me) to build that distribution channel.

Yes--we are currently compensated from Burnlounge to sell products i.e. music, and yes we will be compensated to sell a variety of products in the coming years such as ring tones, movies, TV shows, logo wear, MP3 devices, etc... BUT, we are also paid to create the distribution channel. Why? Because the building of such a large distribution channel will command significant leverage in the music & entertainment industry in the coming years. To give you an example of the value of distribution, consider the recent purchase of MySpace by Fox for $700 million. MySpace is an online chat room with millions of subscribers. They don’t sell a product and their only source of revenue was advertising. So why $700 million? It was a massive distribution channel with millions of people that Fox could reach at the “click” of a button. We are helping Burnlounge create a similar channel, but we DO offer a product—music and entertainment. We are developing that network through our friends, family, co-workers, etc... and we get compensated.

The reason it is unique, is because we are first. Think about it--we get paid to build and maintain the network. In addition, we get compensated on the sales of universal products that everyone understands--MUSIC AND ENTERTAINMENT! My 9 year-old son and my 70 year-old dad both use, consume and understand the product.

A DIGITAL SOCIETY

Nobody will disagree--we are headed to a digital society. There has been a 10 year slump in the music and entertainment industry. The reason--people are stealing music. They don't think that copying CD's and file sharing is illegal, but it is. It affects the artists, record labels, everyone. CD sales were down another 20% in 2004. The music industry realizes that we are headed to a digital age where CD's are becoming digital music files, DVD's will become digital computer files, digital books, etc... Well, Apple and iTunes came up with a solution--sell single songs as a digital computer file for 99 cents, and albums for $9.99. It was a homerun. They have cornered the market. However, there was one flaw--their system, iTunes, was not about music. Most people don't realize this, but iTunes is interested in selling their device, the iPod, Nano, or Shuffle—NOT music. They also don't provide an outlet for independent artists, underserved music categories, geo-specific content, or unlicensed material. With the addition of the new Micosoft-led URGE music store, we are positioned to move even faster. That service will promote the digital file and digital MP3 applications that are compliant with Burnlounge--NOT iTUnes. So buckle up your chin strap, join our team and put us to work. With your help, we will continue to build the strongest team in the company, country and world!

www.indieburner.com

Check it out NOW and at least investigate it. Then, sign up and start Burnin!

3/10/2006  

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