Vibe was getting paid to advertise for a company selling relicensed music, yes.
The jokes are the jokes, but the company was selling non retail CDs
How Columbia House sold 12 CDs for as little as a penny
“Larry: They would license the actual master tapes and the production files for the physical media from the major music companies. And they would be able to manufacture these records at a cost of about $1.50 or so each. In many cases, inferior pressings on vinyl and CD and you wouldn't get maybe the full lyrics and you wouldn't get the nice inserts and stuff and even the little booklets that were included in the CD were not quite as nice as the ones that you would get in the store very often.”