ABSTRACT
A method of direct sale from a record label to a consumer. Record Clubs were established in 1955 as an experiment to test mar-
keting music through the mail by Columbia Records and proved to be highly successful with consumers. The business model for a record club is predicated on consumers agreeing to purchase a minimum number of recordings at regular prices over a period of time, usually a month. An incentive for consumers to join the record club consists of several recordings sent to a consumer below retail price. Although consumers agree to purchase a specific number of recordings during a set timeframe, they are incentivized through a points system, where recordings result in “points” that can be used for future purchases. If a consumer does not pay for merchandise sent or is delinquent in payment, a credit card number, deposited upon commencing membership in the club, will be charged. This retail practice is known as negative option billing and is widely used in other retail sectors. Membership in the record club can usually be terminated after a subscriber has purchased the required number of CDs specified in the contract. If a consumer fails to contact the record club, usually in writing, they will continue to receive the monthly recordings.
