Archive: Justin Timberlake Hearts BurnLounge

New York City-based BurnLounge is a company to keep an eye on. The company has raised $13 million from entertainment industry investors including Justin Timberlake. It turns music fans into promoters and sellers by charging for access to its catalog of music and web storefront tools.

Fans now operate 40,000 online retail shops, and the company claims it’s the fifth-largest music download site.

Murray admits that music generates very low margins — sellers earn 5 cents per song sold or 50 cents per album. The company gives doles out more money for selling BurnLounge stores (and soon merchandise), with an affiliate system set up that requires prospective store operators to sign up through a current store operator. Downloads are WMA files, meaning they won’t play on iPods.

Playing to people’s cool kid aspirations on a slightly janky site? Party promotions also helped drive MySpace to the top…maybe BurnLounge will catch the eye of one of the hungry media moguls. MySpace itself just entered the customizable online music franchise business over the weekend.

The company is facing competition from startups and other large players Other companies that help fans to set up music shops include MySpace partner Snocap, Navio, and Musicane. BurnLounge claims that it is not taking customers from iTunes, or even P2P networks.

Though BurnLounge adds 350 albums per week of unsigned music, according to Murray, its biggest sellers are far and away pop albums from the major labels.