Don’t Cry for Columbia House

There was a time in the 90’s when Columbia House ruled. Big ads in most every popular magazine you opened promised 8 CDs for a dollar. Who could resist? Of course, after your 8 CDs, you were enrolled in a music subscription plan where you were obligated to buy a certain number of additional CDs for the year. But it worked and Columbia House was big business.

Now it’s dead, as Columbia House has gone bankrupt. But don’t cry for Columbia House, it’s all their fault.

The music industry obviously went through a massive transition as it moved from CDs to online streaming and download services. Columbia never managed this transition, instead opting to drop CDs in favor of DVDs. Now that the movie business is also transitioning to online, that dried up too. But they had a golden opportunity to ride the wave and capitalize on their brand. If Columbia House had been very progressive and fearless, they could have started one of the first digital outlets for music, maybe even using the same gambit of a bunch of digital downloads for a penny. Instead, they were scared and clueless, letting Apple revolutionize the industry with iTunes.

Big disruptions have been the norm for the past several years. From the music and movie industries to hotel and taxi industries. Technology and the sharing economy is driving the disruptions. Successful companies are able to adapt to the change and find a way to make it work for them. Fighting the change always results in failure. How many years did the music industry fight before it finally saw the light? Now they complain about the influence iTunes holds over the industry, but don’t cry for the music industry either. They had an opportunity to control their own destiny and failed.

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