Death of the Record Club: Who's Next?

You can’t argue with Darwin—adapt and survive, or die

I grew up in a very rural part of South Carolina—our nearest neighbor was a half-mile away. and they still drew water from a well. So, any time I had contact with the outside world of entertainment, it was a big deal. I can remember like it was yesterday: my parents bringing in and going through the mail, and to them what was junk mail…to me, was gold.

The gold arrived in the form of a flyer sent by the Columbia House mail order music program, which listed the most current and popular record albums. You could choose 12 album or cassettes for a penny (“Wow, a penny! Sign me up!!”), and thereafter were subscribed to being sent future albums at a marginal mark-up.

In the early 70s through the early 80s this mailer had the cover art for every popular album known to man. It was the way I (and I suspect others) kept current with what music was trending. I could look at the album covers for hours. I would study the covers, familiarize myself with the artists, and then wait for that familiar tune to come on the FM dial. And in some strange way, due to the familiarity with the album art, feel connected to the music.

Did I ever order? One time I did—got my 12 albums, and then sent in the cancellation request. But they kept sending those flyers, and I kept poring over them each month. (My how times have changed, what with the instant gratification of the internet.)

So, it may come as a shock that Columbia House was still around…well, at least somewhat around, because they filed for bankruptcy this week—and this Wall Street Journal 

shows there was good reason. And according to Rolling Stone, in Columbia House’s heyday around 1996, they had a profit of $1.4 billion (yes with a ‘b’) but in 2014, with 110,000 members, generated only $17 million in revenue.

So why resort to bankruptcy? Well, the numbers don’t lie—while showing assets of $2 million, they also owe 250 creditors a whopping $63 million! Whoa…who was watching the balance sheets?

In the end, this industry-leading behemoth, which once fed rural mailboxes with the ability to stay plugged into current music, lacked vision. They now blame music and movie streaming for their demise, and that may be true…but companies like Netflix and Spotify owe their very existence to music and movie streaming.

And that’s the lesson for all of us: The good times don’t go on forever. Perhaps when Columbia House was sitting on $1.4 billion in profits, they should have spent a few dollars on creating contingency plans for a changing world. Maybe they could have been the next iTunes if they’d played their cards right. Instead, they go in the same file folder as Mars Music, Atari, Enron, and Commodore.

It’s true the only constant is change, and how we navigate that change determines whether the good times continue in a modified form, or become bad times. The good times are starting to run out for a lot of things, like network TV, magazines, even movie theaters…hopefully they’ll figure out how not to become an extra room in the Columbia House.

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Dendy Jarrett is the Publisher and Director of Harmony Central. He has been heavily involved at the executive level in many aspects of the drum and percussion industry for over 25 years and has been a professional player since he was 16. His articles and product reviews have been featured in InTune Monthly, Gig Magazine, DRUM! and Modern Drummer Magazines.