Burn Lounge

Burn Lounge

BurnLounge, Inc. was an illegal pyramid scheme founded in 2004, with offices in New York City. Its primary business was the BurnLounge online music store, and it was associated with Orbital Publishing, which produced printed matter for the company. Former CEO Alex Arnold (formerly with Excel Communications and founder and former chairman of NuEWorld.com), was partners with Ryan Dadd and Stephen Murray.

Described by Gartner G2 as a multi-level marketing company, BurnLounge prefers the term "concentric retail" to describe its business model. The company provided record labels and artists with a fan-driven promotional channel.

The music service allowed customers to preview and purchase music, and chat through a proprietary client. Customers wishing to sell music through their own custom pages were required to purchase a subscription. Subscription costs varied, and consisted of either an annual fee or an annual fee with an additional monthly charge. These fees only allowed one to redeem sales points for BurnLounge products; participants paid additional fees if they wished to exchange earned sales points for money. A Fortune article places the commission at five cents per 99-cent download.

The company stated that nearly 30,000 people had opened BurnLounge storefronts, including several major label musicians. The service provided content supplied by Muze, with early versions of its software provided by Beatport and SocialIM. Version 0.9 of the software was introduced in October 2005, and version 1.0 was unveiled in Las Vegas on June 9 and 10, 2006. BurnLounge offered only music downloads, but other products such as audiobooks, video, ring tones, and physical merchandise were said to be planned. Burnlounge 2.0 (or BL2) launched quietly on Friday, April 27, 2007.