Columbia House Files For Bankruptcy

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  • #12985
    Craig_Adams
    Participant

    This from All Access:

    The days of eight albums or CDs for a penny are over. At least when it comes to physical product.

    COLUMBIA HOUSE’s parent company, FILMED ENTERTAINMENT, INC., filed for Chapter 11 bankruptcy protection yesterday in a MANHATTAN court after more than two decades of declining revenues, according to NPR.COM.

    COLUMBIA HOUSE moved exclusively to DVDs in 2010 after its annual revenues peaked in 1996 at $1.4 billion, but by last year, revenues had dwindled to just $17 million.

    COLUMBIA HOUSE “started in 1955 as a way for the record label COLUMBIA to sell vinyl records via mail order,” according to the A.V. CLUB, which adds that it “continually adapted to and changed with the times, as new formats such as 8-tracks, cassettes, and CDs emerged and influenced how consumers listened to music.”

    COLUMBIA HOUSE was renowned for its deals, offering a dozen CDs, tapes or vinyl albums for just a penny, though many an unsuspecting consumer was trapped into paying for unwanted product long after that initial subscription ran out.

    How did COLUMBIA HOUSE make money?

    “The phrase you want is ‘negative option,’ ” explained NPR MUSIC contributing editor PIOTR ORLOV, who worked at COLUMBIA HOUSE as Director Of A&R and marketing between 1996 and 1999, referencing the idea of hooking people with a good deal and then roping them into a longer-term contract, which forced you to buy a number of titles at regular prices up to $20.

    COLUMBIA HOUSE signed multimillion-dollar contracts with companies such as SONY, WARNER MUSIC and others that allowed it to produce its own CDs.

    ORLOV insists COLUMBIA HOUSE was valuable in its time.

    “If you didn’t have a record store, this was the closest you got to having a good music selection. It gave the ability to buy CDs and send them to your house even if you lived in [the middle of nowhere].”

    Kind of like SPOTIFY today.

    The FEI statement said the decline was “driven by the advent of digital media and resulting declines in the recorded music business and the home-entertainment segment of the film business.”

    Or, as ORLOV sadly put it, “No one cares about owning CDs anymore.”

    #12988
    Chico
    Participant

    Shocked they made it this long, given how horribly lax their security measures were back in the day. I know people who signed up pets, dead relatives, and Chicago Kenndy voters for the one penny deal. Good luck getting Fido or Hugh G. Rection to pay the 16.99 for the later full priced albums.

    Not that I would know about any of this personally, of course.

    #12989
    paulwalker
    Participant

    OMG I fell for this in 1973 at the age of 13. Yes I did get a whole bunch of 8 tracks for next to nothing but soon after it became on the issue of paying for their selection of the month at really a high price. At which point my dad got involved and wrote a stern letter and they never bothered us again.

    #12998
    Alfredo_T
    Participant

    In 1999, I joined Play from Columbia House. In my recollection, the regular priced CDs were $12.95. I only bought five (?) regular priced CDs. Sometime later, I stopped receiving mail from Columbia House; I think that this was around the time that they were bought out by Blackstone Group L.P. Years later, I found my old Play membership card while cleaning the house and I tried going to the URL printed on the card to see if my membership still existed. The URL didn’t work. Perhaps, I had inadvertently dodged a bullet.

    On a side note, I recall that when major labels largely stopped issuing their releases on LP, a small but vocal group of fans made a fuss that due to the smaller physical size of CDs and cassettes, lyrics and artwork were now tiny and that it had become impossible for posters to be included. Today, if one downloads or streams music, it is an exercise for the listener to find the lyrics (although artist Websites can now provide bonus features that were rare or not possible with physical media releases).

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