Like many of the video stores we used to love, Redbox is done.
Parent company Chicken Soup for the Soul Entertainment — a subsidiary of Chicken Soup for the Soul LLC but not the company that publishes the books — announced it’s moving from bankruptcy to liquidation as investors will no longer finance the DVD rental business, per The Wall Street Journal.
This is the end for Redbox’s 24k kiosks, streaming services, and 1k+ employees.
Redbox started with McDonald’s…
… in 2002 as a means to drive customers to the fast-food chain, though it’s since been owned by Coinstar, Apollo Global Management, and Chicken Soup. Initially, kiosks sold convenience store products, but it was the DVD biz that took off.
Customers liked the convenience of renting a DVD for a buck, then returning it to any Redbox kiosk.
- By 2007, Redbox had more US locations than Blockbuster.
- In 2013, it accounted for 50% of US DVD rentals.
Unfortunately…
… the advent of streaming services led to a steady decline in not just the DVD rental biz but in physical media in general.
While some advocate for the ownership of physical media as streaming services can randomly yank your fave show, a DVD rental biz doesn’t solve that problem.
And while movie theaters are attempting to combat streaming with immersive screenings and luxury food options, kiosks are rarely experiential.
Redbox tried to launch its own streaming services in an already cluttered market, but continued to lose revenue.
It’s also had several issues…
… since Chicken Soup’s acquisition, per The Verge:
- Lawsuits over missed payments from retailers that hosted kiosks and the company that leased vehicles for Redbox’s technicians.
- It stopped offering new movies to rent.
- It stopped sending out technicians, who brought in revenue by repairing other companies’ kiosks.
Now, Redbox has $1B in debt, and last month, failed to pay employees or continue their benefits, per Deadline.
It’s a frustrating end to a once-promising business that we hope won’t get sadder by all the Redbox kiosks turning into bullet vending machines.
