Former Columbia House insiders explain the shady math behind “8 CDs for a penny” • Hacker News Board

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#11

Post by selimthegrim » Mon, Dec 28, 2015, 9:30 AM UTC

malz wrote: post #8

wsc981 wrote: post #7

The whole business was premised on this concept called negative option. Which just sounds so creepy and draconian and weird, but the idea that if you don’t say no, we’re going to send you shit. It’s going to fill your mailbox, and we’re going to keep sending it unless you panic and beat us back. That was how the money was getting generated. Interesting article, but a bit too long. I think in The Netherlands (and perh…

In the US it is Book of the Month Club (surprisingly still in business). https://en.wikipedia.org/wiki/Book_of_the_Month_Club

Sounds like Blue Apron took notes.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#12

Post by jlgaddis » Mon, Dec 28, 2015, 9:31 AM UTC

cpeterso wrote: post #5

jlgaddis wrote: post #3

My first job out of high school was entering those Columbia House applications into a computer database. The amount of fake applications I, personally, came across was astounding. I can remember, on my first day, coming across a batch of applications that were so obviously all from the same person -- different CD selections (six-digit numbers, if memory serves) and different names but the same mailing address and sam…

Interesting! Did your office have a quota or bonus that depended on how many applications were entered? It sounds like some perverse incentive that made sense at corporate HQ but had unintended side effects. :)

ISTR we had a minimum number of applications we were supposed to process (averaged out over a period of time), but I can't recall what that number was.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#13

Post by jlgaddis » Mon, Dec 28, 2015, 9:34 AM UTC

bryanrasmussen wrote: post #10

jlgaddis wrote: post #3

My first job out of high school was entering those Columbia House applications into a computer database. The amount of fake applications I, personally, came across was astounding. I can remember, on my first day, coming across a batch of applications that were so obviously all from the same person -- different CD selections (six-digit numbers, if memory serves) and different names but the same mailing address and sam…

surely filtering out the false applications should have been the task of programmers / DB admins once the data was all in the DB.

One would hope so but the evidence (CDs showing up in the mail) didn't tend to support that assumption. In addition, this was nearly 20 years ago so the technology wasn't as great as it is today. If memory serves, our interface was a DOS-based application with our PCs networked using Netware, if that says anything.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#14

Post by techdragon » Mon, Dec 28, 2015, 9:41 AM UTC

wsc981 wrote: post #7

The whole business was premised on this concept called negative option. Which just sounds so creepy and draconian and weird, but the idea that if you don’t say no, we’re going to send you shit. It’s going to fill your mailbox, and we’re going to keep sending it unless you panic and beat us back. That was how the money was getting generated. Interesting article, but a bit too long. I think in The Netherlands (and perh…

For extra examples, see the non advertising components of the revenue models behind the majority of adult entertainment companies charging subscriptions on the Internet.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#15

Post by chrischen » Mon, Dec 28, 2015, 9:45 AM UTC

brandonmenc wrote: post #6

From the article: "There is an alternative to [Spotify], in getting outside of it, but only if we have net neutrality. If they really fuck with net neutrality, then I don’t know what independent musicians are going to do. Right now, you can go up on Bandcamp and you can put out your record, and they take their 15 percent cut, and you can make a fair amount of money selling a couple hundred CDs. You can do okay. But i…

Spotify could make the argument that they are willing to provide free unlimited music streaming to impoverished Americans (as an altruistic act of course) by partnering with ISPs (of course Spotify will still serve ads to these users). They would pump their millions of dollars as a large player in the industry into this effort, and music listening becomes de-facto based on the Spotify platform because they've invested in a deal that would bring free music streaming to the masses of impoverished and (musically) underserved Americans.

Smaller streaming services such as Bandcamp, with their selfish capitalistic intent on charging for their services directly, cannot compete with the pervasiveness and free-ness of Spotify services. People cannot fathom why they would pay to buy music when Spotify is so generously providing it for free (faster loading, free, and doesn't use up their data allotments!) included in their ISP plan.

Far down in the future Spotify realizes they don't have to improve their services anymore. They realize "hey altruistic act we did is actually a great indirect way to pay to make our competitor's services worse, instead of investing in making our services better."

By paying to prioritize their traffic at the network level, Spotify realized they can leverage their existing size, money, and power to simply hold down the competition at the ISP level rather than rise up above them in the product level.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#16

Post by mattlutze » Mon, Dec 28, 2015, 9:52 AM UTC

brandonmenc wrote: post #6

From the article: "There is an alternative to [Spotify], in getting outside of it, but only if we have net neutrality. If they really fuck with net neutrality, then I don’t know what independent musicians are going to do. Right now, you can go up on Bandcamp and you can put out your record, and they take their 15 percent cut, and you can make a fair amount of money selling a couple hundred CDs. You can do okay. But i…

Or ISPs with a penchant for expansion can produce Spotify competitors (many mobile carriers already do have their own streaming music services) and favor those over competing services as included/complementary/whathaveyou services. It's not a particularly ridiculous end to walk out to, really.

Once they have their service they don't need to do any favors for other music competitors, such as Bandcamp, unless those services "partner to provide a premium experience." In this fuzzy future, they need not block it, just make that traffic part of the basic pipeline that gets regularly and frustratingly throttled.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#17

Post by sandebert » Mon, Dec 28, 2015, 10:12 AM UTC

wsc981 wrote: post #7

The whole business was premised on this concept called negative option. Which just sounds so creepy and draconian and weird, but the idea that if you don’t say no, we’re going to send you shit. It’s going to fill your mailbox, and we’re going to keep sending it unless you panic and beat us back. That was how the money was getting generated. Interesting article, but a bit too long. I think in The Netherlands (and perh…

There are a bunch of book clubs in Sweden still doing this to this day. I actually assumed it was common all over the world, but perhaps that isn't the case?

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#18

Post by mixmastamyk » Mon, Dec 28, 2015, 10:49 AM UTC

Yes, good memories. I was a member of Columbia and BMG clubs many times over the years, often with multiple memberships at a time for a decade or so in/after high school.

Note: this article does not explain the math at all, it is mostly about paying rent in Manhattan.

Despite what the article implies, it was easy to figure out if you can use a calculator and was an awesome deal. Add up the cost for all discs total, then divide by the number of them and voila, you'd end up paying something like $4.XX per CD with shipping. Which was amazing when stores were selling albums for $16 +/- $2. Then you'd cancel as soon as you tired of the mailings. I never knew why they did it but I didn't care.

In fact I built my ~500 CD selection that way. Probably 1/2 to 2/3 came from the clubs. Many of the rest bought used. Topical story because I just pulled them out of storage and are ripping them a final time to .flac and then will send them off somewhere.

Any tips on a service for that? I had found an interesting startup last year that would take your collection in bulk, rip, and put you in a marketplace to trade with others. But, unfortunately I've already lost the name and can't find it again.

edit: did the dvd club also around Y2k, was great also for a round or two before getting the axe. That was about the time a friend got me a DirecTV descrambler card so didn't sweat it.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#19

Post by gozo » Mon, Dec 28, 2015, 10:56 AM UTC

sandebert wrote: post #17

wsc981 wrote: post #7

The whole business was premised on this concept called negative option. Which just sounds so creepy and draconian and weird, but the idea that if you don’t say no, we’re going to send you shit. It’s going to fill your mailbox, and we’re going to keep sending it unless you panic and beat us back. That was how the money was getting generated. Interesting article, but a bit too long. I think in The Netherlands (and perh…

There are a bunch of book clubs in Sweden still doing this to this day. I actually assumed it was common all over the world, but perhaps that isn't the case?

It's called a "dark pattern" these days. JustFab is a prominent example and has been discussed on HN.

Re: Former Columbia House insiders explain the shady math behind “8 CDs for a penny”

#20

Post by mixmastamyk » Mon, Dec 28, 2015, 10:59 AM UTC

jlgaddis wrote: post #13

bryanrasmussen wrote: post #10

Earlier quoted context omitted.

surely filtering out the false applications should have been the task of programmers / DB admins once the data was all in the DB.

One would hope so but the evidence (CDs showing up in the mail) didn't tend to support that assumption. In addition, this was nearly 20 years ago so the technology wasn't as great as it is today. If memory serves, our interface was a DOS-based application with our PCs networked using Netware, if that says anything.

That technology was fine, the policy and culture is what mattered. Likely people were making sales targets and bonuses and looked the other way at "fraud" that aligned with that goal.