So Long, 20th Century: Columbia House Files Chapter 11

Ex-mail-order giant just couldn't compete with digital music, streaming
By Jenn Gidman,  Newser Staff
Posted Aug 11, 2015 11:24 AM CDT
So Long, 20th Century: Columbia House Files Chapter 11
No more 12 CDs for a penny.   (Shutterstock)

Nearly everyone with a penny and a PO box who came of age in the final part of the 20th century built up their CD—or gasp, cassette tape—collections with the help of mail-order giant Columbia House. But what the Verge calls the "Spotify of the '80s" is now just a memory after owner Filmed Entertainment Inc. filed for Chapter 11 bankruptcy protection yesterday in the wake of almost 20 years of plummeting revenue, the Wall Street Journal reports. What finally did in Columbia House, which gave up its stake in the music industry in 2010 to concentrate on its DVD club: the advent of digital media and services like Netflix and Amazon, the paper notes. The DVD market had already been sliced in half from where it was in 2006, bringing in just $11 billion in 2013, according to a media analysis firm cited by the Journal—and the ever-increasing popularity of streaming movies and TV shows was effectively the final nail in the coffin.

For a time, Columbia House and its rival BMG Direct (which it merged with in 2005, per the Huffington Post) were the go-to warehouses for music aficionados who took advantage of seemingly irresistible deals like eight CDs for a penny. But there were drawbacks, including high shipping costs and markups on other albums that members had to buy over time, Huffington Post notes, as well as a "negative option" business model that involved sending CDs customers didn't ask for unless they remembered to opt out—an option an ex-worker recently described to the AV Club as "so creepy and draconian and weird … the idea that if you don't say no, we're going to send you shit." Those annoyances, followed by the arrival first of Napster, then the iPod and iTunes, and finally by streaming services, helped deplete Filmed Entertainment's revenue coffers from $1.4 billion in 1996 to $17 million in 2014, the AP reports. (Neil Young says the quality of music streaming "sucks.")

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