For example, Cracked Rear View, Hootie & The Blowfish's 1994 debut smash, owed a whopping three million of its 13 million sales to record clubs — and yet the band received little to no royalties for any of them. Pearl Jam claimed to have lost royalties on a million "free" copies of its 1993 sophomore outing, Vs., and in 1995, Meat Loaf sued Sony over unpaid royalties from a million record-club sales of his 1977 classic, Bat Out Of Hell.
Of course, very few successful ventures can continue making money forever. The record clubs' ongoing battles with traditional music retail outlets (who, on average, paid $5-$6 wholesale more per CD than the clubs) eventually resulted in litigation that closed many of the licensing loopholes that had been so integral to the clubs' bread and butter. By that time, though, many labels had already jumped ship, leaving the clubs with fewer artists' catalogs to draw from.
Both clubs and traditional brick-and-mortar music stores also suffered as big-box, nontraditional conglomerates like Barnes & Noble, Best Buy, and WalMart took on a greater market presence. Oh, and there was the small matter of this little thing called the Internet, too.
Columbia House was bought in 2005 by its main competitor, BMG Music Service — a move precipitated in part by the 2004 merger of Sony Music Entertainment and Bertelsmann Music Group. This wagons-circling move also spoke to the decline of the vitality of the club business, which had been in a tailspin for the previous decade. By 2008, BMG Music Service was folded into yourmusic.com, which still required the purchase of a CD a month, but no longer offered the introductory incentive deals associated with the record-club salad days. Yourmusic.com hobbled along for a few years, but the gravy train was over. Earlier this summer, it was dissolved by parent company Direct Brands, Inc. (DBI), which also owns other mail-order direct-marketing services such as Doubleday Book Club.
That wasn't quite the last we would hear of the record club, though. In August of this year, a nationwide class-action lawsuit was filed against DBI, seeking monetary damages and an injunction stopping them from alleged unauthorized credit card charges, inability to cancel, unwanted products being mailed, overcharging, and other abuses (which might explain DBI's unwillingness to go on record for this piece). When former club members, who'd had no account activity for years, began receiving notices in their mailboxes suggesting they had not fulfilled their membership obligations, these individuals received not only a dubiously conceived threat to their credit, but also a last-gasp reminder from a fading business, crying out: "Remember us, the once-almighty and popular record club?"
It is, perhaps, a fittingly ignoble end to a sketchy business that scammed consumers and artists alike while anticipating and facilitating the inevitable fracturing of the traditional music-business model.
And yet, the record club was one of the most ingenious marketing ploys of the 20th century, perhaps right up there with rock and roll itself. It introduced the notion of getting music for free — which may have ultimately led to its own destruction, when people stopped buying even CDs. But those of us who remember it in its prime find pause when pillaging a torrent site or googling for the .rar file of a new album, and remember the halcyon era when checking off which records to get for "free" with an introductory signup to the club felt like the sweetest deal in the universe.