Columbia House, once a mail-order giant, files for bankruptcy

Universal Music, the largest recorded music company, also decided not to renew a license agreement with Columbia House.

The reasons for the bankruptcy read like a history of the changes that have swept through the entertainment industry and retail over the last two decades.

Around the same time, online marketplaces like Amazon.com and eBay were taking off and Netflix offered unlimited DVD rentals through the mail.

Shrewd users know that even cancelling the service was a type of bargaining tactic; Columbia House (and rival BMG Music Service, which shut down in 2009), had a reputation of offering more lucrative deals to former subscribers over the phone. Columbia House’s revenues peaked in 1996 at approximately $1.4 billion and declined in nearly every year since then. Stating marketresearch, the guardian of Columbia Home claims the DVD marketplace has reduced since 2006 by about 50%. With the advent of digital media and players, cloud storage and streaming options, its revenue totaled only about $17 million in 2014.

All operations are expected to continue throughout the process, and the Company will continue to service its members and sell DVDs. The Company was historically active in the musical compact disc business, but exited the music business in 2010.

The business design of the company’s runs on the technique named the ” choice period that is damaging”.

Columbia House eventually switched to just selling DVDs, but things still went downhill.

The Columbia House website says new members have to buy one full-priced DVD and they get a second one for free. They likewise have to cover delivery.

The Chapter 11 petition was filed in the U.S. Bankruptcy Court for the Southern District of New York (Manhattan).