In a move that signals the final chapter for a once-popular movie rental service, Redbox is closing all of its DVD rental kiosks.
This decision comes as its parent company, Chicken Soup for the Soul Entertainment, takes steps to liquidate its assets.
The company’s financial troubles have escalated quickly.
What began as a Chapter 11 bankruptcy filing has now turned into a Chapter 7 liquidation case.
The impact on employees was swift and severe, with over 1,000 workers losing their jobs without severance pay.
Redbox’s decline mirrors the broader shift in how we watch movies.
As streaming services gained popularity, fewer people were visiting those familiar red kiosks outside grocery stores and pharmacies.
Redbox is shutting down. pic.twitter.com/e0e2wTBQoH
— ToonHive (@ToonHive) July 11, 2024
The numbers paint a clear picture of this change.
Variety reports that Redbox hit its peak in 2013, bringing in $1.97 billion in revenue.
At that time, the company had more than 40,000 kiosks across North America.
Fast forward to today, and the landscape looks very different.
The financial situation is dire.
Chicken Soup for the Soul Entertainment’s recent filing shows debts of $970 million.
The list of creditors reads like a who’s who of Hollywood, including major studios like Universal, Sony, Warner Bros., and Paramount. Retail giants Walgreens and Walmart are also owed money.
Adding to the company’s woes are allegations of mismanagement.
HPS Investment Partners, a lender, has accused controlling shareholder William J. Rouhana Jr. of self-dealing and mishandling the business.
The accusations are serious, including claims that Rouhana failed to pay workers’ salaries and health benefits.
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Redbox’s story shows just how quickly a successful business model can become obsolete if company leaders don’t adapt to a changing world.
