Columbia House Files for Bankruptcy, Blames Streaming

[Adenoid_Hynkel]

Source: Rolling Stone



Columbia House, the mail-order music retailer that turned an "Eight CDs for a penny" offer into an annual profit of $1.4 billion at its peak, has filed for bankruptcy. Filmed Entertainment Inc., the parent company for Columbia House, filed for Chapter 11 bankruptcy protection in New York Monday, citing the ever-changing digital and online landscape that continue to erode at the physical medium's sales, the Wall Street Journal reports.

"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," the company's director Glenn Landberg wrote in the bankruptcy filing. In 1996, Columbia House's profits peaked at $1.4 billion; by comparison, the company only managed $17 million in revenue in 2014.

Columbia House, whose thin cardboard ads for their unique one-penny offers populated nearly every issue of magazines like Rolling Stone in the mid-Nineties, got out of the music business in 2010 as MP3s, streaming and illegal downloads made their CD endeavor unprofitable. For the past five years, Columbia House has instead been dealing in DVDs, but even that market has experienced some rough times as Netflix, streaming and piracy cut into that medium's sales.

Although Columbia House still boasts 110,000 members, the company listed total assets of $2 million while owing $63 million to over 250 creditors. Columbia House's fall has mirrored the CD and DVD markets themselves: In 2000, the music industry sold roughly $13 billion worth CDs. That total was down to $1.85 billion in 2014. Similarly, DVD sales have plummeted by 50 percent between 2006 and 2014.


Read more: http://www.rollingstone.com/music/news/columbia-ho

[mahatmakanejeeves]

1. I'm sure I speak for a lot of people when I say

"Are they still around?"

[Auggie]

2. You do for me

[Yavin4]

3. Good.

One of the worst consumer frauds in America.

[yellowcanine]

24. Yep. No tears here. They kept on milking the cash cow until the cow died.

Adapt or die. Works for me.

[cbdo2007]

4. Makes sense...I just asked the 20 people here in my office when they last purchased

a physical cd or DVD and only 2 people had in the past year.

Unless you have a corner on a specific niche, like Disney DVD Club, then this model just won't work for you any more.

[Nye Bevan]

12. My 9-year old daughter has literally never put a CD or DVD into a player.

It's all Netflix and Amazon streaming these days.

[Liberalagogo]

5. But, but where will I get my 8-track cassettes NOW?

[Cirque du So-What]

15. Dating myself here...

but I joined to get 11 vinyl LPs for a penny.

[yellowcanine]

25. Sometimes you can get lucky at a yard sale.

[Hugin]

6. Maybe now they'll cancel the membership I never had...

But, they insisted I pay for back in '85.

[jwirr]

7. There are a number of entertainment industries that are having trouble competing with the

internet. Hollywood has been complaining for years as are the theaters that show their movies and the stores that sell the videos. Like wise music is having trouble with sales of their music when it is so available on line at little or no cost. I recently watched a session on Link about the same problem with books. With the invention of the Kindle etc. libraries and book sales are in danger of disappearing.

It is not so much that we no longer want the product it is a matter of how the product is delivered. The Link segment specifically talked about the fact that the creators of the product are the ones who are losing out. And that is true of all of these industries. So the real problem is how do we pay the creators enough for their product so that they will continue producing them.

And do we really want to let things like a library or a movie theater disappear? Libraries are already adjusting to the problem by creating new services for their users.

Our library has a fantastic idea in that they have developed special use areas such as a room especially for the use of children containing computers and games and toys as well as access to books. They also have special area for teenagers and so on. Families especially use it as a place to take their children for an afternoon that is free. They also have programs that deal with topics of interest to all ages from a special movie to a class on using a yoyo. So I think the library will survive.

I am not so sure about the rest.

[Nye Bevan]

14. Movie theaters suck these days because of people texting and talking.

If the owners want me to go then they need to clamp down on that kind of thing.

[Bigredhunk]

19. Yup

Agree with you 100%. I still go to movies reluctantly (b/c I love movies), but I'd go a lot more and enjoy it a lot more if theaters would crack down on bad behavior. Theaters do nothing about it. They show their stupid cartoon ad before the movie. When the movie starts there's nobody to be found. If you have a problem you have to deal with it yourself or go out to the lobby, miss 5 minutes of the movie, and have a 16-yr-old kid sent in to "scold" the annoyers.

Then they (theaters) whine about people not going to movies, piracy, etc... Maybe people are tired of dealing with morons. There's enough stress in life. Going to a movie shouldn't be stressful.

[jwirr]

23. I see the point but I am old enough to remember theaters being the only place one saw movies.

Surely you do not think that they are making much money today with the competition? The point of the whole discussion is not about how good one theater is but if enough people are going to keep them open.

But mostly the discussion is are the creators of the movies making enough money to make it worth their while to continue? And that is true of all the other venues also.

[jwirr]

22. The point was not if your movie theater sucks. BTW ours does not. The point is that no one

goes much at all anymore.

[Blue_Tires]

27. Well, not only that

but home theaters are so much better now...Comfortable seat in your living, room, all the food and drink you want, you can pause the movie when you need to go to the can, and no usher to throw you out the theater when you're passing second base with your date

[meegbear]

8. CDs?

I remember when it was records or 8-Tracks.

Now get off my lawn!

[sarge43]

11. I remember 78s

Get outta my cave!

[meegbear]

21. +1!!

[Nye Bevan]

9. I have CDs on my shelves right now that I bought from them in the 90s.

You just had to be organized enough to remember to tell them not to send their selection to you every month.

[jmowreader]

10. Walmart and Amazon didn't do them any favors either

[Deadshot]

13. I thought Columbia House was dead a long time ago.

[HFRN]

16. they were an educational giant in this country

they taught everyone the meaning of 'fine print'

[HFRN]

17. DAMMIT! I said 'original' and they gave me extra crispy!

has nothing to do with the subject in question, but I thought the world needed to know what just happened to me after I wrote the above post - I guess I just gave away that I'm in the central time zone

[mahatmakanejeeves]

18. Not so farfetched.

GMA: Unaccredited Degree Holders Fool Public

May 16

You might think that a "love doctor" in Phoenix, a college professor in Howell, Mich., and a court administrator in Tucson, Ariz., would have impressive educations. ... Both list Columbia State University on their resumes.

What their employers didn't know is that Columbia State is not a college or university at all. It was a diploma mill that shipped out phony certificates until federal agents shut the operation down in 1998.

As Good Morning America's consumer correspondent Greg Hunter first reported a few months ago, there are hundreds of diploma mills, organizations that pose as accredited schools, issuing degrees. ... In his ongoing probe, Hunter has found several cases of people in high-profile jobs who purchased such degrees from Columbia State.

A Common and Bogus Link

"Columbia State did not exist. It was never even the tiniest bit close to real," said John Bear, an author who tracks so-called "diploma mills" and who has served as an expert witness for the FBI on the subject.

[cosmicone]

20. Smart businessmen pivot to fit new landscapes

These idiots could have given iTunes and other streamers a run for their money in 1996 ... but there was so much profit in CDs that the greed made them blind.

[rocktivity]

26. Oh, jeez, I feel SO sorry for them

I'm surprised they lasted this long into the technological age.

Cue the DU "Cry Me A River" String Quartet!


rocktivity

[Amishman]

28. i'm genuinely amazed they survived this long

I would have thought they would have gone away a decade ago

[mahatmakanejeeves]

29. Adding a video

Hat tip, Joe.My.God: Columbia House Declares Bankruptcy

[GOLGO 13]

30. old company can't learn new tricks

You don't deserve to live if you refuse to change to what the market dictates. Blame streaming, piracy or whatever. They let it happen to themselves. No sympathy from me.

Movie theaters just suck. Who want to deal with the buffoonery of the unwashed masses and psychos with guns wanting to shoot you in the back of the head. Not interested.