Music Distribution

Columbia House is a brand that distributed music through the mail.  It was widely popular in the 70s with membership over 3 million by 1975 according to “Columbia House Company History”.   According to bankruptcy court documents Columbia House was founded in 1955 as a division of CBS.  Since then, Columbia house has sold phon6recordings, vinyl records, cassette tapes, video tapes, CDs and DVDs.

Sales

However, by 1999, sales began to decline with the advent of the internet.  The internet brought companies such as Napster and Amazon which would take from Columbia House’s market share.   As 2001 passed, Columbia House only accounted for 8.1 percent of all CD sales.  This was due to the internet as well as stores such as Wal-Mart, which offered CDs at similar discounts without subscriptions (click here to learn more).

Reason for Bankruptcy

Due to this continue downfall the parent company for Columbia House, Filmed Entertainment Inc., filed for Chapter 11 bankruptcy protection in New York, to sell what remains of the once giant music retailer.  In an affidavit filed in bankruptcy court by the company’s director Glenn Langberg, he states that, “The business has been in decline for approximately two decades, driven by the advent of digital media and resulting declines in the recorded music business and the home-entertainment segment of the film business.”  He goes on to state that the business  “peaked in 1996 at approximately $1.4 billion … and declined in almost every year since then.  In 2014, the Company’s net revenues were $17 million.”

Unfortunately, the internet has forced many companies to innovate, restructure and rebrand.  Unfortunately, many once household names such as Columbia House and Blockbuster could not keep up with the change.