Columbia House to Relaunch as Vinyl Subscription Service in 2016
December 24, 2015
Four months after declaring bankruptcy, mail-order retailer Columbia House thinks they have uncovered a path to solvency: Vinyl. Hoping to capitalize on the record fad, Columbia House's new owner announced plans to revive the company as a vinyl-only delivery service. Columbia House got out of the music business entirely in 2010; since then, they've operated as a DVD marketplace.
"You can see a yearning and an interest to try a new format," John Lippman, who bought the Columbia House brand out of bankruptcy for $1.5 million, told the Wall Street Journal of the company's plans. "For a category that is meaningful and growing rapidly, you don't see a whole lot of choice."
At its peak in 1996, the service and its "Eight CDs for one penny" offer raked in an annual profit of $1.4 billion, but the decline of both the music and DVD industries ultimately resulted in Columbia House filing Chapter 11 bankruptcy in August, blaming streaming services for their free fall. At that time, the company's assets were valued at $2 million while it owed $63 million to over 250 creditors.
However, while CD and DVD sales continue to steadily decline, the vinyl resurgence has seen nationwide retailers like Urban Outfitters, Barnes & Noble and even Whole Foods dedicating floor space to the medium. Vinyl sales rose 52 percent over the first half of 2015, with one-third of all physical music sales now vinyl records. However, that total only represents 7 percent of all music purchases.
"It's not that digitization is going away," Lippman said. "I think there is a sense among a lot of people of looking to get back to the broader experience of engaging with media." While Columbia House hasn't cemented their vinyl operation yet, they have launched a site – Columbia House Record Club – with a promise that they "will return in 2016."
Columbia House will find some competition in the burgeoning vinyl resurgence from membership clubs like VNYL and Vinyl Me, Please.