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    Monday, May 06, 2024

    Columbia House — 12 albums for a penny! — files for bankruptcy

    Before there was iTunes, before there was Spotify — heck, even before Al Gore rolled up his sleeves and invented the Internet — there was Columbia House.

    The company defined mail-order music for generations of shoppers and pioneered some of the most obnoxious, misleading and hard-to-remedy marketing tactics ever inflicted on consumers.

    And now Columbia House, bless its evil little heart, is bankrupt.

    The owner of the company, Filmed Entertainment Inc., filed for Chapter 11 Bankruptcy Court protection from creditors earlier this week, saying it saw little hope of making a buck selling CDs and DVDs in an increasingly digital world.

    Anyone who wants to buy the remains of Columbia House can have them, the company said. Probably cheap.

    Glenn Langberg, a director on Filmed Entertainment’s board, said in court papers that the company’s revenue peaked in 1996 at roughly $1.4 billion. It’s been downhill ever since, hitting just $17 million last year.

    “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,” Langberg said.

    There will be some who will smile with nostalgia at the mention of Columbia House. It’s hard to forget the ubiquitous ads and mailers offering eight or 10 or a dozen albums for a penny.

    A Verge writer said the ad, with its catalog of albums and artists, made him feel “like I was Ralphie in ‘A Christmas Story,’ entranced by the potential and wonder.”

    I can relate. I too saw Columbia House’s come-ons and thought, “Wow! Twelve albums for a penny!” And I sent in my list of desired records.

    This was the 1970s, so you can assume the likes of Yes, Deep Purple, and Emerson, Lake and Palmer were well represented.

    My records arrived as promised, and then down, down, down I went into the Columbia House rabbit hole as unwanted records continued arriving every few weeks. The onus was on me to pay for them or return them.

    This, in case you’re wondering, is what’s known in the marketing world as “negative option billing.” That means the customer agrees to keep paying for something until he or she fulfills the terms of the deal and can call it quits.

    “Negative option marketing can pose serious financial risks to consumers if appropriate disclosures are not made and consumers are billed for goods or services without their consent,” the Federal Trade Commission said in a 2009 report.

    It took me a long time to buy the requisite number of full-priced albums needed to cancel my membership. I remember how frightened I was of the consequences of being beholden to these people forever. I was 15 years old; what do you want?

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