Columbia House was a multi-format business, very sensitive to "hits", which experienced booms when new formats were being adopted. It catered to collectors, not with "quality" per se, but convenience and bargains.
(Recognizing the weird/sleazy negative-option element, it was possible to use Columbia House to amass product at a discount while playing by the rules, as explain by others.)
The CD boom pushed the company toward $2 Billion annual revenue. Take these numbers as fuzzy. Revenue definitely dropped, but it was still sizable for music, though the music clubs became much less profitable...
When Bertelsmann acquired Columbia House to eliminate the competition for BMG, the music clubs were shut down. While I can sympathize with people calling Columbia House a failed business, its music business did not fail.