For more than half a century, a record club built up music collections and drove customers crazy.
The bait was hard to resist: up to a dozen albums for a penny. Sure, there was a “small” shipping and handling fee. And buy x-number of albums at full price over x-number of years. And mail back reply cards if the monthly featured selection didn’t appeal to you. And endure legal notices in case you didn’t pay up. And, if you cared to dig deeper, support the no or reduced royalties on those bargain albums paid to performers and publishers. And, if you wanted to dump the albums, discover used music stores that refused to accept them, citing inferior pressing quality.
But a dozen albums for a penny! Even with the additional costs factored in, Columbia House and its competitors were an affordable way to build a music collection, especially back-catalogue items you might not have rushed down to the local bricks-and-mortar store to buy. You could kill hours browsing microscopic print to make the right picks.
At their peak in the mid-1990s, record clubs across North America raked in $1.5 billion annually. At the end of the 1990s, Columbia House Canada held the second largest market share among Canadian music retailers, behind bricks-and-mortar retailer HMV. Their power over sales was such that many large chains boycotted the 1996 Juno Awards when Columbia House was named an official sponsor.
Then the Internet came along. The only surprise over this week’s announcement that the American remnants of Columbia House has filed for Chapter 11 is that any trace of the former giant still existed.
Columbia House’s half-century presence in Toronto began when the Columbia Record Club launched on both sides of the border in 1955. It was promoted via ads through local retailers ranging from Eaton’s to Sniderman’s Music Hall (the College Street forerunner of Sam the Record Man). The original offer was a choice of one free record from a list of 12. After that, you had to buy four LPs at list price over the next year, with a free record tossed in for every two you bought. The offer was adjusted over time: by 1968, the deal was eight free records if you bought nine over the next year.
The company experienced pains after purchasing the rival Capitol Record Club of Canada in 1974. “Quite frankly,” Columbia House Canada VP/GM Richard Gurian told the Star, “we didn’t do such a great job in taking over” after discovering how many bad accounts were inherited. Moving its computer services from its Don Mills office to the headquarters in Terre Haute, Indiana created customer invoice problems.
One result: for the rest of the 1970s, Columbia House provoked the highest number of complaints about a single firm received by the Star’s Star Probe consumer-help column. Most aggravating was the steady stream of increasingly threatening notices to pay up in cases where items didn’t arrive or requests to close properly paid accounts were ignored. As Star Probe columnist Rod Goodman put it, “It is a shame that the law allows firms to throw legal notices at customers without making even a token effort to determine the facts.” Readers frequently vowed never to deal with direct marketers ever again.
Goodman published an example of the form letters complainants received. This one was the first stage in prodding a delinquent customer, utilizing an obnoxious “friendly” approach:
Have you ever tried wishing away your troubles? They just don’t go away. The only way troubles will disappear is by doing something about them. In our case, I mean yours and mine, our troubles could disappear if you would only pay your bill. We would both be relieved of a big burden. Especially since the time is rapidly approaching when I must make a decision whether or not to turn your account over to a collection agency. Send your payment today and breathe a sigh of relief.
That letter may have been signed by “Douglas Mitchell,” the fake name Columbia House used for its friendliest reminder. Not as nice was “Frank Pearson,” who asked if you forgot the bill before demanding payment. If nothing was resolved, “Clark Weatherbee” threatened legal action or harassment from a collection agency. These names helped Columbia House staff determine account status whenever a frazzled customer called in. “Suppose everyone wrote to me and I wasn’t here,” Gladys Perry, Columbia House Canada’s manager of fulfillment, told the Globe and Mail in 1982. “Imagine all the frustration that would build up. And what if I were to leave the company?”
Sometimes the form letter went too far. One Weatherbee form used in the early 1980s advised clients that “we are now fully aware of your extremely poor credit risk status.” While Parry dismissed complaints about that wording, noting that those who supposedly owed Columbia House did “not necessarily have a poor credit rating in the whole community,” lawyers took the company to task. The wording was removed.
Perhaps employees were fatigued by legitimate deadbeats, who made up to 35 per cent of their customer base. Some went far to get their cheap albums: a North York couple was charged in February 2000 for defrauding Columbia House out of $20,000 over the previous year. Under different names (yet using the same address), the couple submitted 28 handwritten and over 1,000 online club applications, yielding a bounty of 900 CDs.
Columbia House soldiered on even when rival BMG Music Service launched with a Boxing Day advertising blitz in 1994. BMG’s promise of no further obligations past the promotional offer was an immediate hit, drawing 300,000 members in 10 months. Both services, and their offshoots, fought it out in mailers, ads, and online until BMG pulled the plug on its Mississauga facility in early 2000. As online shopping cut into its base, Columbia House was sold to a succession of new owners. The end for its Canadian operation came in December 2010, when Direct Brands closed its east Scarborough office.
Additional material from the August 16, 2008 edition of Billboard; the October 15, 1955, April 15, 1982, and August 26, 1998 editions of the Globe and Mail; the March 1968 edition of Maclean’s; and the October 12, 1976, March 24, 1977, April 10, 1979, and December 10, 2010 editions of the Toronto Star.