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Hey Mom, buy your music from me

14 December 2006 One Comment

I somehow got suckered into going to a multi-level-marketing (MLM) meeting not too long ago. No, not Amway… BurnLounge. Burnlounge is an MLM scheme where you pay around $500 to start your own music store in order to sell to your friends and family. Burnlounge allows you to customize your own front page and provides you with a URL like:

http://burnlounge.com/yourMusicStoreNameGoesHere

When your friends and family go to your Website, they can buy music from you for the great price of…. drumroll… $0.99 a pop. The music selection and prices are all controlled by Burnlounge, so what is the rationale behind your friends and family buying from you rather than from iTunes or any other site that sells music for the same price? Because they’re family and family would rather buy music from you than Steve Jobs. Yes, until they get sick of you and your cousin and your sister all competing to try and sell them music, at which time they’ll just go to AllOfMP3.com and buy music for 1/5 of the price anyways.

But they quickly moved away from the conversation about price, because they want you to believe that the competitive aspects of the business (price, services, selection, etc.) are inconsequential. Like any other MLM scheme, the focus isn’t on selling the product (music in this case), it is on building a self-sustaining network of people who are selling to their friends and family and building their own networks. This is called a pyramid. But they don’t call it that, they want you to naively believe that “a series of concentric circles” is something different than a pyramid.

I sat through 2 hours of listening to one speaker after another attempt to appeal to the human affect/emotion rather than the human intellect/logic. If you’ve ever been to a MLM meeting you’ve heard the ridiculously stupid rhetoric before: “This isn’t for everybody. Some people get it and others don’t. Those of us who get it will become successful.” And unbelievably, tons of people were suckered in by this inane form of reverse psychology. Or better yet, “Look at all these rich and famous people who are involved. They’re all doing it, so it must make sense.” As if rich and famous people never jump on the bandwagon or make horrifically stupid business decisions. A quick look through a list of common logical fallacies would show that they violate almost every single one. There is almost nothing logical about they way they present their business model.

And I am so glad that I’m a tech geek, because I could hardly believe the horrifically misleading or patently false information they were feeding this crowd of unsuspecting, non-technical folk. For example, they promote the fact that their music is available in WMA format, and fail to mention that this will only play in Windows Media Player. They also fail to mention that their music will not (as far as I could tell) play on an iPod. Ya, let’s just ignore the fact that the iPod has about 80% of the market share in portable MP3 technology, and fail to inform prospective store owners of that.

Then they were pitching DRM as a benefit to their consumers!! DRM is a technology designed to limit the product owner’s rights (you know, they one who paid for the product) in order to protect the intellectual property rights of the artist. That’s like saying that Toyota added technology to their cars that would prevent you from changing the paint color, tuning your engine, or adding aftermarket parts, and then touting that as an advantage for the customer.

Or better yet, they appeal to common practice by saying that McDonalds is successful because they have thousands of stores not just one; so, logically it must make sense to have thousands of music stores online. Hmm, last time I checked Amazon, Ebay, Circuit City, and Gap all have a single online store. Wow, how do they succeed!?!? Could it have anything to do with the fact that McDonalds sells a tangible product and must have multiple stores to position itself in different geographies in order to distribute their tangible product? An intangible product, such as a copy of a song, can be distributed globally with a single distribution channel. How could people fall for this ridiculously illogical argument.

The bottom line is that if you’re going to get involved in a business your focus should be on selling your product not on building a network of salesmen. You should be thinking of ways to compete against your competitors. And honestly, its not “your business” unless you can directly control the competitive nature of your business. Can you add new services? Can you change your prices? If not, then you are just a sales person for somebody else’s business.

One Comment »

  • Anonymous said:

    We have a saying: for every smart @ss there is a d.ck with labyrinth.
    Iomoio.com