Columbia House, Famous For 12 CDs For $.01, Is No More
OKLAHOMA CITY - Kids who grew up in the 80s and 90s may want to pour some out for the demise of Columbia House. The once booming mail-order music (and later movies) distributor filed for Chapter 11 Bankruptcy protection on Monday.
Some will recall their plentiful periodical inserts and think good riddance. But others will look back fondly on their membership in the “Columbia Record Club” and remember how they once scored eight CDs or 12 cassette tapes for one cent. And then they’ll recall the horror of learning the true meaning of the saying “If it’s too good to be true, it probably is.”
The Columbia Record Club was created as an experiment in 1955. The idea was to market music directly by mail to the consumer. And the premise was simple: You can have this obscene amount of music now for basically nothing, but later you promise to buy “X” amount of other albums over the year; Albums that are marked up considerably and come with shipping costs. Still, consumers bought in and the company flourished.
Columbia House reached its peak in 1996, when membership in the club topped approximately 16 million and its revenues stood just shy of $1.5 billion. But it was all downhill from there, as the company only posted net profits of $17 million in 2014.
Over the years the company changed hands many times. By mid-2009 the company, then owned by a private investment group, shut down its mail-order music operations and only sold DVDs and Blu-rays.
Its decline remained steady with the constant changing of the marketplace, with things like iTunes and Spotify allowing consumers to buy and download directly to their devices instantly. The need for the physical handling of a CD is now nearly obsolete with Bluetooth connectivity.
Finally on Monday, the parent of the Columbia House music and DVD clubs announced that they were selling the business through bankruptcy auction. And now that stack of ill-advised CD purchases sitting in the closet just garnered some nostalgia value.
Some information provided by CNN Money, Huffington Post, The Verge, Wikipedia