BMG Music Service Canada disbanded

BMG Music Service Canada, a popular online and mail order CD club, has been disbanded, affecting an estimated 800,000 members.

The music club's owner, Germany's Bertelsmann AG, decided to abandon the venture after "re-evaluating its marketing strategy." In an e-mail to subscribers, the company says it is "no longer going to pursue the Canadian market."

BMG Direct would not comment further on the decision but it is thought that it ran into too much competition with online retailers such as HMV.com and CDPlus.com.

According to the National Post, BMG Music Canada which operates separately from BMG Music Service Canada, was surprised with the decision.

Bertelsmann has already closed its Mississauga, Ont. distribution centre, laying off about 140 people, and will close customer accounts later this month.

Columbia House Canada, a larger online and mail order music club, says its own business is doing well and has no plans to cease operations.