There was an article in Billboard a few months ago about the rise and fall of record clubs. In the early nineties, they boomed largely due to the Columbia House-BMG rivalry, accounting for up to 18% of overall sales. The decline was due to:
–internet sales/downloading
–the Sony/BMG merger of 2004, which also merged Columbia House and BMG. With little record club competition, the companies stopped their heavy spending on ads and cut back the generosity of promotions.
–record companies ending their licensing agreements with the record clubs. In order to pay for the promotions, record companies and artists had to accept lower royalties. More and more companies in the 2000’s weren’t willing to accept these terms.
I really did enjoy record clubs. All I had to do when they sent me an album I didn’t like is just take it back to the post office. They had much better selection than mall stores and discount retailers, which made them helpful in small towns. (Especially in the '90s, when many of these stores wouldn’t sell parental advisory albums.)
Back in high school, I signed up for a couple dozen BMG accounts simultaneously all with fake names and ended up with hundreds of CDs at once. I then filled my backpack with the discs and sold them to other kids at school for $8 a piece. It was pretty good money considering my part time job paid only $4.25 per hour at the time.