When I was a kid, I remember receiving CD’s in the mail. I didn’t pay for them myself but my parents always talked about getting several CD’s for pennies on the dollar and I specifically remember being excited to open the packages because they would always get me a few. The company was Columbia House and I will never forget how the advertising and packaging looked. It was literally a small staple of my childhood because I would use those CD to make mixtapes and I would also use them to “DJ” my parent’s basement parties. Well, it seems as if the party is over now.
Columbia House, the mail-order music retailer has filed for bankruptcy. Filmed Entertainment Inc., the parent company for Columbia House, filed for Chapter 11 bankruptcy protection in New York Monday, citing that the digital market has essentially crushed their business model. The Columbia House brand was introduced in the early 1970s by the Columbia Records division of CBS, Inc. as an umbrella for its mail-order music clubs, the primary incarnation of which was the Columbia Record Club, established in 1955. The company has obviously gone through several owners and changes since it’s inception but the most recent change came in December 2012 when the company was sold to Pride Tree Holdings, Inc. In 2013, the company changed its name to Filmed Entertainment Inc and now we have a bankruptcy filing.
At it’s peak, Columbia House was doing quite well with a profit of $1.4 billion in 1996. Although Columbia House still has 110,000 members, the company listed total assets of $2 million while owing $63 million to over 250 creditors. You can’t survive with a margin like that and the company is obviously a long way away from the days of billion dollar profits. We are a long way from the 90’s, we are a long way from mail orders being significant in the music industry, and we are also a long way from the days of me being excited to open up a Columbia House package to see the next CD’s I was going to use for a basement party.