Columbia House Files For Bankruptcy After 20 Lackluster Years

After about 20 years of declining sales, Columbia House has filed for bankruptcy. The chapter 11 bankruptcy will involve the business being auctioned off to whomever wants it, though there aren't likely to be many bidders battling it out — the company's name is arguably all it has keeping it afloat, though even that hasn't been enough to keep its value from plummeting. Columbia House found its success years ago as a mail-order CD business, which it killed off half a decade ago.

The one thing about Columbia House you're likely to remember is its biggest schtick — getting 8 CDs for a penny, and then failing to cancel the membership and finding out the hard way that a penny could end up being really expensive. Columbia House managed to hold on to its music business until 2010, when it finally closed shop and switched focus.

Columbia House has since then operated with a similar club membership that revolves around DVDs rather than music CDs — only that hasn't proven successful for the company, which isn't surprising given how consumers have gravitated toward Netflix and other streaming options (when is the last time you ordered a DVD from Netflix?).

The bankruptcy is being filed by Filmed Entertainment Inc., Columbia House's parent company. It will be selling the DVD Club business. The company, as expected, cited digital movies as the reason for its demise, as DVD sales have dropped in the same way CD sales declined. At its peak in 1996, Columbia House had $1.4 billion in sales. As of last year, the company only raked in $17 million.

SOURCE: Los Angeles Times