CDNOW
Encyclopedia
CDNOW.com was an online retailer. The company was founded in February 1994 by twin brothers Jason Olim
and Matthew Olim of Ambler, Pennsylvania
. Initially launched as a telnet
service in August 1994, CDNow became a retail website in September 1994—far earlier than most of the dot.com retailers that gained notoriety after 2000.
CDNow was one of the 1990s' most well known websites, first to offer the largest number of albums in quantity and variety available on the Internet, and second, as a source of All Star Music News and very substantial numbers of record reviews and other editorial content related to music, and third, as a source of the first online interviews with popular artists, and finally, CDNow was the first place to sample the most popular music in RealAudio
format. The first samples were uploaded near the end of 1995, bringing the site the definitive Bookmark status on publications and web guides in those years.
in Penllyn, Pennsylvania
, which it outgrew when it reached 55 employees. It then moved to the old Strawbridge & Clothier building in Jenkintown, Pennsylvania
, where it went public
in February 1998, with 110 employees and annual (1997) revenues of around $18M. A short time later, CDNow acquired its largest competitor, another Philadelphia area company, N2K, whose online properties included Music Boulevard, Jazz Central Station, and other popular sites. During its extensive growth campaign, CDNow was an early innovator in internet advertising, preference-based retail recommendations, online video, the use of editorial content as a means to promote interest in all sorts of music, one of the first significant online vendors of video (movies, etc.), the creation of the first affiliate marketing program on the internet, e-mail marketing
, and more. As the company moved to Fort Washington
, its employees numbered over 500 (with offices in New York City
, London
, and San Francisco), and revenues exceeded $130 million. By 2000, CDNow downsized to about 400 employees, and was eventually bought by Bertelsmann
.
(emphasize brand, profits will follow). In March 2000, Barron's published an article that focused on CDNow's increasing financial difficulties; it was the first of many articles that would follow, and would cover the demise of many promising internet companies. At the time, CDNow was set to merge with Columbia House
, in a deal that would establish a new public company jointly held by CDNow's shareholders, Time Warner
and Sony
. The deal did not materialize, and instead, in the summer of 2000, Bertelsmann acquired CDNow for its new BeMusic internet music group (which was also to include BMG Direct, a record club), and was also related to Bertelsmann's financial involvement with Napster
.
purchased the rights to CDNOW and began operating the CDNOW web site, a move that gave little warning to CDNOW customers. By this time, the CDNow operation was largely absent; the brand continued, but as a part of Amazon. Amazon discontinued CDNOW's music profiling section, although it now offers a similar service. Rateyourmusic.com was indirectly created as a response to the loss of CDNOW's recommendation service.
In 2011, the cdnow.com domain was in use by a different company.
Jason Olim
Jason Olim is CEO and a co-founder of Freshman Fund. Prior to Freshman Fund, Olim was CEO and co-founder of CDNOW, Inc., one of the first ecommerce companies...
and Matthew Olim of Ambler, Pennsylvania
Ambler, Pennsylvania
Ambler is a borough in Montgomery County, Pennsylvania, in the United States, approximately 16 miles north of Philadelphia.- Village of Wissahickon:...
. Initially launched as a telnet
TELNET
Telnet is a network protocol used on the Internet or local area networks to provide a bidirectional interactive text-oriented communications facility using a virtual terminal connection...
service in August 1994, CDNow became a retail website in September 1994—far earlier than most of the dot.com retailers that gained notoriety after 2000.
CDNow was one of the 1990s' most well known websites, first to offer the largest number of albums in quantity and variety available on the Internet, and second, as a source of All Star Music News and very substantial numbers of record reviews and other editorial content related to music, and third, as a source of the first online interviews with popular artists, and finally, CDNow was the first place to sample the most popular music in RealAudio
RealAudio
RealAudio is a proprietary audio format developed by RealNetworks and first released in April 1995. It uses a variety of audio codecs, ranging from low-bitrate formats that can be used over dialup modems, to high-fidelity formats for music. It can also be used as a streaming audio format, that is...
format. The first samples were uploaded near the end of 1995, bringing the site the definitive Bookmark status on publications and web guides in those years.
History
The operation was started in their parents' basement, using Valley Records Distributors as a drop-ship fulfillment center. With three employees, the company moved its headquarters a few miles down the road to a train stationPenllyn (SEPTA station)
Penllyn is a station along the SEPTA Doylestown Line. The station, located at the intersection of Old Penllyn Pike and Pen-Ambler Road, includes a 43-space parking lot. This station is served by the Lansdale/Doylestown Line. Penllyn station was built in 1930 by the Reading Railroad.-External...
in Penllyn, Pennsylvania
Penllyn
Penllyn is a former civil parish in the Welsh county of Gwynedd. The parish was created in 1894 from the part of Criccieth parish that lay outside the ancient borough. It was abolished in 1934, and divided between Llanystumdwy and Criccieth....
, which it outgrew when it reached 55 employees. It then moved to the old Strawbridge & Clothier building in Jenkintown, Pennsylvania
Jenkintown, Pennsylvania
Jenkintown is a borough in Montgomery County, Pennsylvania, about 10 miles north of downtown Philadelphia. "Jenkintown" is also used to describe a number of neighborhoods surrounding the borough, which also are known by names such as Rydal, Jenkintown Manor and Noble...
, where it went public
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
in February 1998, with 110 employees and annual (1997) revenues of around $18M. A short time later, CDNow acquired its largest competitor, another Philadelphia area company, N2K, whose online properties included Music Boulevard, Jazz Central Station, and other popular sites. During its extensive growth campaign, CDNow was an early innovator in internet advertising, preference-based retail recommendations, online video, the use of editorial content as a means to promote interest in all sorts of music, one of the first significant online vendors of video (movies, etc.), the creation of the first affiliate marketing program on the internet, e-mail marketing
E-mail marketing
Email marketing is a form of direct marketing which uses email as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing...
, and more. As the company moved to Fort Washington
Fort Washington, Pennsylvania
Fort Washington is an unincorporated census-designated place and suburb of Philadelphia in Montgomery County, Pennsylvania, United States. The population was 5,446 at the 2010 census.-Prior to the Revolutionary War:...
, its employees numbered over 500 (with offices in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, and San Francisco), and revenues exceeded $130 million. By 2000, CDNow downsized to about 400 employees, and was eventually bought by Bertelsmann
Bertelsmann
Bertelsmann AG is a multinational media corporation founded in 1835, based in Gütersloh, Germany. The company operates in 63 countries and employs 102,983 workers , which makes it the most international media corporation in the world. In 2008 the company reported a €16.118 billion consolidated...
.
Decline
CDNow was among the first of the internet companies to show signs of struggle with the emerging internet economy business modelBusiness model
A business model describes the rationale of how an organization creates, delivers, and captures value...
(emphasize brand, profits will follow). In March 2000, Barron's published an article that focused on CDNow's increasing financial difficulties; it was the first of many articles that would follow, and would cover the demise of many promising internet companies. At the time, CDNow was set to merge with Columbia House
Columbia House
The Columbia House brand was introduced in the early 1970s by the Columbia Records division of CBS, Inc. as an umbrella for its mail-order music clubs, the primary incarnation of which was the Columbia Record Club, established in 1955. It had a significant market presence in the 1980s and early...
, in a deal that would establish a new public company jointly held by CDNow's shareholders, Time Warner
Time Warner
Time Warner is one of the world's largest media companies, headquartered in the Time Warner Center in New York City. Formerly two separate companies, Warner Communications, Inc...
and Sony
Sony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
. The deal did not materialize, and instead, in the summer of 2000, Bertelsmann acquired CDNow for its new BeMusic internet music group (which was also to include BMG Direct, a record club), and was also related to Bertelsmann's financial involvement with Napster
Napster
Napster is an online music store and a Best Buy company. It was originally founded as a pioneering peer-to-peer file sharing Internet service that emphasized sharing audio files that were typically digitally encoded music as MP3 format files...
.
Purchase by Amazon
Initially, Bertelsmann merged CDNow's operations with those of the BMG Direct record club in a venture called BeMusic. By 2001 Amazon.comAmazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
purchased the rights to CDNOW and began operating the CDNOW web site, a move that gave little warning to CDNOW customers. By this time, the CDNow operation was largely absent; the brand continued, but as a part of Amazon. Amazon discontinued CDNOW's music profiling section, although it now offers a similar service. Rateyourmusic.com was indirectly created as a response to the loss of CDNOW's recommendation service.
In 2011, the cdnow.com domain was in use by a different company.