On August 10th 2015, Columbia House filed for bankruptcy under chapter 11. The one time mail order giant known to many consumers in the 80s and 90s as the Columbia Music and DVD Club, was once worth some 1.4 billion dollars in revenue a year. Film Entertainment Inc., the company that owns Columbia House, cited the advent and subsequent rise of digital distribution, and the continuing pace of the growth of technology, for the company's demise.
Columbia House was founded in 1955 as a division of CBS Inc. Early on, it was most noted for offering records and tapes, and then in the 80s it was CDs and cassettes that could be had for a penny. As their business continued to grow, DVDs were added. The company would offer as many as a dozen or more CDs or DVDs for the low penny price, if the consumer was willing to commit to a two, three, or four year contract to buy them at regular club prices. Those prices could be as much as $19.99 each.
Digital file formats such as the Mp3 in the 90s slowly began to erode the popularity of music's physical distribution model and many feel, the value of music as well. File sharing increased the possibility and the amount of illegal downloading and music piracy. At the beginning of the twenty first century, the introduction of the of the iPod and digital music stores made buying singles the preferred way to buy music as opposed to albums.
By 2010, Columbia House had given up the music side of its trade in favor of a DVD only business. But, by 2014, annual revenue had fallen to just $17 million, while its membership had fallen to just 110,000 participants. Film Entertainment has tested both film and music streaming, but it is not clear if the company will proceed in either direction in the future.
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