Columbia House – the mail-order music and movie membership club known for selling multiple CDs (eight, for example) for a penny – just couldn’t make it work in the digital age: Its owner filed for Chapter 11 bankruptcy protection in New York on Monday, according to Rolling Stone.
In the ‘90s, Columbia House was highly popular and brought in profits of $1.4 billion in 1996. But by 2010, the company had backed out of the music business, unable to compete against MP3s and streaming sites and focusing instead on DVD sales.
By 2014, revenue had fallen to $17 million. And while the Columbia House membership is still 110,000 strong, about $63 million is owed to over 250 creditors, Rolling Stone says.
“This decline is directly attributable to a confluence of market factors that substantially altered the manner in which consumers purchase and listen to music, as well as the way consumers purchase and watch movies and television series at home,” Glenn Langberg, director of Columbia House's parent company, wrote in court documents, according to The Wall Street Journal.
And no, I never had a Columbia House subscription, although when I was younger, Dad got a bunch of CDs from them and then canceled his subscription early to keep the CDs. The people who didn't read the fine print, well, they had to pay for those CDs, often those they didn't want, every month. Think of it as Netflix or GameFly, only for music. Just goes to show you that a billion dollar empire can turn into a multi-million dollar mess the next day. Progress is a harsh mistress, and there are always going to be losers as well as winners.