America Online and Columbia House Sign Marketing Agreement

Because online music retailers like CDNow and have likely taken a bite out of record-club sales, last week Internet company America Online and direct music marketer Columbia House announced a marketing agreement for both online and offline advertising and promotions, including product bundling, direct-mail initiatives, and co-marketing and advertising campaigns. Under the multi-year agreement, Columbia House, with more than 13 million members, will promote its music, video, and DVD clubs on AOL's Shopping Channel, as well as on, CompuServe, Digital City, and Entertainment Asylum.

In addition, Columbia House says it will offer options enabling its members to request AOL software, will distribute AOL software in its product-fulfillment mailings, and has guaranteed AOL a minimum number of new memberships. AOL members who click on the various Columbia House icons and advertisements will be directed to a customized, co-branded home page designed especially for the AOL audience with offers created for AOL members.

"Columbia House understands that the online medium brings a whole new level of convenience to clubs as they reach out to potential members," said Bob Pittman, AOL's president and COO. "Through this alliance, Columbia House will enhance our members' online experience by enabling them to join music, video, and DVD clubs more easily and conveniently than ever, as well as create new opportunities to increase our membership. We're really looking forward to making a well-respected and household name like Columbia House available to our members."

"We've achieved excellent results to date from expanding our traditional Club business into the online environment," said Bill Ostroff, VP, Columbia House Interactive. "There is no better way for us to strengthen our presence in this medium than partnering with AOL, which has the largest member base of any interactive services company. Selecting AOL as our preferred interactive service presents a clear win for us, both in terms of reaching and servicing our existing members and acquiring new customers."