WASHINGTON, Aug. 11 (UPI) — The parent company of former music giant Columbia House filed for chapter 11 bankruptcy protection Monday after experiencing significant losses in the digital age.
Wall Street Journal reports company director Glenn Langberg filed the papers on behalf of Filmed Entertainment Inc. at the U.S. Bankruptcy Court in Manhattan. Langberg seeks to sell the remainder of the business.
At the Columbia House’s peak in the mid-1990s, it reportedly raked in as much as $1.4 billion in sales of its extremely cheap CD bundles. However, the business’ net revenue only reached $17 million in 2014 after shutting down its CD business in 2010. For the past five years, it focused on DVDs.
Because of the dramatic shifts in the means by which people enjoy media — from purchasing physical copies of music, movies and TV shows to downloading and streaming — Columbia House reportedly experienced declining revenue almost every year since its heyday.
“This decline is directly attributable to a confluence of market factors that substantially altered the manner in which consumers purchase and listen to music, as well as the way consumers purchase and watch movies and television series at home,” WSJ reports Langberg said in court papers.
Columbia House still claims 110,000 members in the wake of its bankruptcy protection claim. Court papers say the company owes $63 million to over 250 parties while only having $2 million in total assets.
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