After 60 years, the one-time mail-order music-retail giant Columbia House has finally hit bankruptcy. On Monday, parent company Filmed Entertainment Inc. filed for Chapter 11 protection as the company allegedly just realized hard copy CDs and DVDs are quickly becoming obsolete.
According to a report by the Wall Street Journal, the company earned just $17 million last year after it hit its revenue peak almost 20 years ago at roughly $1.4 billion:
“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,” Mr. Langberg said in court papers.
Currently, Columbia House’s only service is their DVD club as the company ended its CD and cassette-tape retail offerings in 2010. Today, there are roughly 110,000 members still acquiring DVDs from the service which apparently relies on third parties to assist customers, as Columbia House no longer has any real employees.
Since the invention of the iPod, iTunes and the inevitable rise of music-streaming services, the market for CDS has declined from its $13 billion revenue in the year 2000 to just $1.85 billion just last year.
Former Columbia House Art Director Mark Rubenstein commented on the company’s financial status by saying, “The thing I remember most is their unwillingness to change with the times. The writing was on the wall. They either didn’t see the writing or didn’t want to read it.”
(Via the Wall Street Journal)
