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FTC Accuses BurnLounge of Being Pyramid Scheme

Burnlounge In what may not come as a surprise to some industry followers, the Federal Trade Commission (FTC) has filed a complaint in Federal Court alleging that digital music multi-level marketer Burnlounge is an illegal pyramid scheme - see article here, while you can download the actual FTC document here - 

MLM services need to have very high gross margins to support an actual operating business through multiple levels - I have personally never understood how a digital music business with 20-30% gross margins can support one level of retailer, let alone multiple levels, but I guess we're about to find out on June 19th when the hearing takes place.

June 14, 2007 in Digital Music |

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