Paradigm Shift?

Every so often in the business world, including the MLM world, a paradigm shift occurs in how companies generate and run business. One could argue, the initiation of network marketing, as a paradigm shift within the marketing community and us old guys have definitely seen a shift from the cleaning product days of AMWAY (I only had to have 200 active personally sponsored individuals, yea!) etc. Today I want to highlight a company mmoguls. I was recently solicated by this company as they are within their prelaunch stage. I found the concept intriguing, they essentially are trying to cash in on a current entertainment and socialization paradigm shift and by so doing could create a whole new paradigm shift in the MLM world.

MMOGULS is creating a MLM distribution network for online video games and social networking sites. Yes online video games. Sound crazy, well it may be but consider a few points.

• The one-day record holder for a movie premiere was Spiderman 3, which brought in $59 million in ticket sales on its opening day. MGM’s James Bond movie just surpassed it last week with $79 million. Grand Theft Auto IV, a video game, recorded sales of $310 million... on its first day.
• For the first time last year, the video game industry surpassed the movie industry in gross sales.
• 68% of households in the United States play computer or video games. Game software sales were $2.6 billion in 1996, and by 2006 they had reached $7.4 billion.
• Forty-seven percent of video game players are between the ages of 18 and 49. The fastest growing demographic is the 50-plus crowd.

This is not even including the massive Asian market. Lets take a look at one example, World of Warcraft. Chances are you have heard of it, or you are playing it right now on your dual monitor. If you haven't, I bet you would be surprised to know many of your friends probably do. Now i am sure you are thinking, "If I was 20 something or so maybe, but not my friends, not at my age". Well i know several partners in law firms (can't seem to get away from those attorneys) that are diehards, we are talking 40, 50+ year old extremely successful men battling it out day in and day out in the virtual world of AZEROTH. The game itself has 10 million subscribers which at $15.00 a month pop brings in about 150 MILLION dollars EVERY MONTH. No shipping, no bottling, no tied up in customs, no tied up in our eastern carrier hub, no physical product. Every month people pay for digital information and this information has created its own economy in the form of gold farmers.

Yes gold farmers. In the game the currency is well gold, but for those people who dont want to spent the time and hard work neccessary to get that gold you can pay real dollars and currency for digital gold. Numerous controvercies have stemmed from these "Chinese" gold farmers either from online gold business making chop shops to the occassionally self made digital gold farmer who passed up on school to make an equivalent $60,000 worth of income annually digitally gold farming. Not bad, especially if your only 9. In total 1.7 BILLION dollars are paid for digital products such as gold, weapons etc every year.

With this in mind, who wouldnt want to cash in on this emerging entertainment venue. MMOGULS also plans to include some sort of social network within its business strategy although how this will plan out with so many dominant free social networks currently available presents many questions. That being said, they have StarGate coming out this summer, and with strong reviews so far, it looks as if they will catch a market. Currently you can enroll and your monthly fee goes towards your virtual mall and social site but will include the games when they become available.

Unfortunately, the largest market of $15 dollar game subscribers are not paid in their binary compensation plan. Only individuals who purchase larger enrollment options that border on non-product based commissions brings into account a former company BurnLounge.

BurnLounge wanted to cash in on the digital media industry, specifically music. One of my friends was the lead architect of the software system for BurnLounge so i came into contact early on with the company. Despite there initial reports of paying only 37% commissions out with a whopping 17% on the third level of a unilevel system (worst compensation plan i have ever seen) I was alarmed to see that my monthly payment went towards granting access to only my burnlounge store. In other words, monthly charges with no music. Now even though the backend possible payout was horrible with the compensation plan you could make some money on the front end with fast starts if you enrolled new members at a huge price tag, but those people got, once again, no music with purchase. So you made money off of new subscribers and not products. Classic Pyramid Scheme definition. You can read more on the BurnLounge FTC rulings at mlmwatchdog.com.

In conclusion MMOGULS has a good idea coupled with a growing industry but the real question is how do you make money off of the $15 dollar subscriber. If that question can be solved they can relieve the potential FTC closings as well as make the opportunity more enticing for the big dogs.