Колумбия Хаус: Музыкалық клубтар тарихы

Mail order music club brand by Columbia Records

Columbia House was an umbrella brand for Columbia Records' mail order music clubs, the primary iteration of which was the Columbia Record Club, established in 1955. The Columbia House brand was introduced in the early 1970s by Columbia Records (a division of CBS, Inc.), and had a significant market presence in the 1970s, 1980s and early 1990s. In 2005, longtime competitor BMG Direct Marketing, Inc. (formerly the RCA Music Service or RCA Victor Record Club) purchased Columbia House and consolidated operations. In 2008, the company (as well as book club operator Bookspan) was acquired by private investment group Najafi Companies, and its name was changed to Direct Brands, Inc. Although Direct Brands shut down music mail order operations in mid 2009, it continued to use the Columbia House brand to market videos in the U. S. and Canada, selling DVDs and Blu rays via the controversial practice of negative option billing. DB Media's Canadian assets ceased operating on December 10, 2010, and all staff were dismissed, while U. S. operations continued as usual. In December 2012, the company was sold to Pride Tree Holdings, Inc. In 2013, the company changed its name to Filmed Entertainment Inc. The sale of the DVD division at bankruptcy auction was announced August 10, 2015.

Columbia Record Club was formed in 1955 by CBS/Columbia Records as an experiment to market music directly by mail, spurring sales to rural consumers and heading off competition from mail order companies from outside the record industry. New members to the club were enticed with a free record just for joining. In 1996, club membership was at 16 million. That year, the Columbia House website was launched. It was relaunched in 1979 as the Canadian Music Club, attracting 100,000 members by the end of that year. Within months, CDNow was purchased by Bertelsmann, which partially merged it with BMG Direct into a venture called BeMusic. CDNow was taken over and merged into Amazon the following year. By 2001, music clubs accounted for less than eight percent of all CD sales, coinciding with the ascent of Internet shops and retail outlets such as Amazon and Wal Mart, which offered music at similar discounts without subscriptions.

In 2001, a security breach in the Columbia House website exposed thousands of customer names, addresses and portions of credit card numbers, leaving private information about customers vulnerable to exploitation. The issue involved a particular section of the website, which could easily be accessed by deleting a portion of the website address in the address bar, discovered by customer Mark Alway. Upon the discovery of the breach, he emailed the Columbia House staff who were quick to respond to the problem. This event gave rise to concerns over the website's capability of keeping private information secure from hackers or devastating scams. Although no information was reportedly obtained from the temporary breach according to Columbia House, industry professionals were quick to point out that the simple error was the consequence of negligent handling of customer information.

In 2002, Sony and AOL Time Warner sold 85% of Columbia House to The Blackstone Group L. P., a New York based investment firm. The next year, the possibility of a merger of Columbia House and Blockbuster Inc. was reported in the Wall Street Journal, Associated Press reports, and trade publications. Although the owners were said to be in talks, the merger never materialized. In 2005, longtime competitor BMG Direct Marketing, Inc., then the current owners of BMG Music Service, acquired Columbia House, renamed the merged company BMG Columbia House, Inc., and consolidated operations under the BMG Music Service name. In 2008, the company, including its Canadian branch, was acquired from Sony BMG by investment firm JMCK Corp., a Najafi Group company based in Phoenix, Arizona, and the name was changed to Direct Brands, Inc.

The parent of the Columbia House music and DVD clubs announced on August 10, 2015, that it plans to sell its Columbia House DVD Club business, which sells recorded movies and TV series directly to consumers, through a bankruptcy auction.

While Sony Music still owns the Columbia House trademark, Edge Line Ventures LLC is the current licensee of the Columbia House name.

During the first three decades of Columbia House, it had a most unique marketing strategy: Give the customer several albums for free (although most of its early marketing campaigns required the customer to tape a penny to the enclosed postcard/order form) with the promise that they would purchase a set number of records or tapes at full club prices plus shipping. There were dozens of small sheets of stamps that were enclosed in the mailer; these stamps had pictures of the actual album cover of the records offered by Columbia House. The customer would tear the stamp off the sheet, moisten the stamp and affix them onto the order card. These Columbia House envelopes would arrive as junk mail to what seemed was everyone's home on a regular basis. One recipient might get one type of offer, but a neighbor might receive a more lucrative offer. Many times, it was the teenagers of the house who intercepted this mail. They were easily suckered in with the idea of getting the albums they wanted all at once and all they had to do was to buy three or four albums within the next two or three years. There were many underage customers who legally could not be bound to this agreement; Columbia House knew these were unenforceable, but they apparently did not care (though eventually this policy did change). Columbia House (and other music clubs) made it extremely easy to defraud them. There were countless cases of customers joining the music club, receiving free albums and never ordering more albums at full price as agreed. Customers would join the club several times under different names with no intention of paying in extreme cases receiving recordings with a retail value worth hundreds of thousands of dollars.

Columbia House practiced negative option billing, The practice has drawn many complaints from consumers. The Federal Trade Commission has published information to protect customers against this practice, specifically referencing a $0.49/video offering.

In specified circumstances, "memberships" are available, whereby the customer is not required to respond to Director Selection mailings unless he or she wants to buy the movie. When such memberships expire, the old rules return where a response is required in time to prevent shipping of full price movies without customer input. Customers are not reminded when those rules change. The customer also has access to a large variety of other movies, which are advertised by mail and online towards the customer. Only full price purchases deplete that minimum purchase obligation. Purchases are not cumulative, meaning that two movies bought at ten dollars each do not deplete the minimum list price movie purchases by one movie. If the minimum number of movies has not been purchased by the end of the term, the monetary worth of those movies is charged to the customers' accounts. If any purchases have been made using Columbia House's point of sale device, either credit cards or debit cards linked to credit card accounts, then those accounts are automatically debited. The company will either mail or email a reminder notice prior to the commitment expiring, giving the customer the opportunity to purchase the required purchase obligation before they are charged for any commitment or contract charges. Likewise, backordered movies are automatically debited to those accounts when they become available, without further notification to the customers. Failure to clear such purchases result in collections efforts by Columbia House against the customers.

In December 2008, BMG Music Service (now yourmusic. com) supposedly sold an unknown number of fraudulent debt claims to a collection agency, National Credit Solutions. Supposed delinquents were not made known of their debt and most had not made purchases with the company for at least five years. Victims of the sale of false debt claims were not made known of either their debt or the account opened with National Credit Solutions. Most victims learned of the collections agency account when they were denied for a loan, had credit cards canceled, or checked their credit reports.

On August 4, 2011, a nationwide class action suit was filed against Columbia House (Direct Brands Inc.) seeking monetary damages and an injunction stopping Direct Brands Inc. alleged business practices of unauthorized credit card charges, inability to cancel, unwanted products being mailed to homes and several other alleged issues.

Columbia House offered a point system, where movies bought resulted in "points" or "Fun Cash" ("Dividend Dollars" was the term used when the movies came in VHS format, which is no longer the case). There were a number of restrictions to the use of Fun Cash, which generally made regular re enrollment a lower cost and more tangible option for those interested in savings.

Columbia House has made forays into other media besides music and movies. For a few years, Columbia House offered a CD ROM club, allowing customers to buy computer games. It is now allowing members to buy video games from its site, but thus far has not offered a specific club for this. One can also enter into agreements concerning the regular purchase of "box sets", which are compilations of popular TV series. One agreement, allows customers access to any of Columbia House's products. Everything can be sourced via the company website.

As of 2010, this business had an unsatisfactory rating with the BBB because of a failure to respond to complaints. The company also has an unsatisfactory record because of a pattern of complaints. Specifically, complainants allege receiving merchandise and/or bills for merchandise from BMG/Columbia House for products they did not order. Complainants further allege that they did not join BMG/Columbia House and do not know how the company obtained their information and that the company's phone line and website do not provide live customer service representatives to help resolve these problems.