The Wall Street Journal reports Filmed Entertainment Inc. filed for chapter 11 at the U.S. Bankruptcy Court in Manhattan, citing the advent of digital music and dramatic changes in technology that are threatening to render CDs and DVDs obsolete.
Since peaking in 1996 at about $1.4 billion, revenue has declined almost every year since, according to FEI director Glenn Langberg. Last year, net revenue was just $17 million.
“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,” Mr. Langberg said in court papers.
Columbia House was founded in 1955 as a division of CBS Inc. Historically, it was most active in the music industry, offering stacks of CDs or cassettes for as little as a penny. But Columbia House ended that business in 2010, leaving DVDs as its only remaining product line. Today, the DVD club has 110,000 members, according to court papers. Columbia House has licensing agreements with major film studios as well as smaller independent studios, court papers show. Those licenses, however, included only physical DVDs and not digital formats.
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