I was not a Columbia House subscriber, but I’m pretty sure my older brother was. For just a penny he got the latest CDs from AC/DC, Def Leopard, Aerosmith and basically any other 80s hair metal band that cracked the Billboard top 10.
Then, my mother told him to quickly cancel before we had to start paying real money.
Even back then, many people recognized there was an important catch in what companies like Columbia House offered. Now many will probably say the brand is finally paying the price.
The fall of the house of Columbia
This week Columbia House announced that, after 71 years in business, it will be shutting down permanently on Sept. 15. The news has already prompted a degree of wistfulness on social media, as well as the typical harsh commentary/warnings about failing to keep up with changes in technology.
What’s more remarkable, at least to me, is how Columbia House managed to deliver a customer experience (CX) that was as successful as it was divisive.
Let’s start with the positives: Columbia House tapped into what was already a deep consumer concern around the affordability of entertainment products.
It’s easy to forget that, when I was a kid, the average price of a CD could range between $14 and $30 dollars.
Considering a Spotify subscription now gives you access to untold numbers of albums and songs, a penny for a dozen CDs was pretty compelling.
The experience, though, was all about choice and anticipation. Instead of scrolling through a streaming service and methodically building a playlist, Columbia House let you pick through products you would permanently own.
Then you had the anticipation of waiting to receive them in the mail. While CX leaders would rightly say people prize instant gratification, there was a bit of magic in finding your new music library sitting on your doorstep.
The House always won
Now the negatives: After it briefly went through bankruptcy 10 years ago, an article on Vox explained how Columbia House predicated its entire experience on what was described as a “negative option model”:
Basically this meant that, after your initial penny purchase, the company would continue to ship products (and charge for them), until you explicitly said “No!” Rather than trying to entice consumers to want to make purchases and building a business around their relationship with their consumers, it shipped by default and made consumers literally pay the price.
By this definition, you could argue that Columbia House will continue to live on in countless direct-to-consumer brands, B2B software-as-a-service (SaaS) offerings and, yes, streaming services.
(Just yesterday I got asked whether I would like to turn off subscription renewal reminders for a service I use so that it could just keep billing me quietly.)
Not everyone minds, of course. Last year someone started a thread about Columbia House on Reddit asking how many people had partaken in the “scam.”
There were plenty of commenters who said they accepted the terms, and one mentioned how his friend kept signing up for the penny offer using the name “Bill M. Later.”
Columbia House may have faltered because it was focused on providing physical media, but it stayed afloat amid the transition from vinyl records to cassettes and later CDs.
Many of today’s brands will be lucky to last one decade, let alone seven. I can’t quite make up my mind whether Columbia House is an example of great CX or CX that deserves to die. What I do know is that it’s worthy of being remembered.