Chicken Soup for the Soul Entertainment has announced the closure of Redbox, marking the end of an era for the iconic DVD rental kiosk business. Following the conversion of its Chapter 11 bankruptcy to Chapter 7 liquidation proceedings, the parent company has ceased operations, leaving over 1,000 employees without jobs or severance benefits.
Redbox, known for its network of 24,000 DVD rental kiosks across the U.S., struggled with declining business even before Chicken Soup for the Soul Entertainment acquired it in 2020 for $370 million. The company’s revenue peaked in 2013 at $1.97 billion, but faced challenges amidst the shift towards digital streaming platforms.
The bankruptcy filing, listing debts of $970 million against assets of $414 million, highlighted financial distress exacerbated by creditor actions and management disputes. Judge Thomas M. Horan approved the Chapter 7 liquidation, emphasizing the inability to meet financial obligations including employee compensation.
Chicken Soup for the Soul Entertainment, also responsible for Crackle and other streaming services, cited difficulties in servicing Redbox’s debt amidst reduced demand for physical media post-COVID-19. The company’s leadership changes and financial turmoil ultimately led to the dissolution of operations.
The closure of Redbox underscores broader challenges in the physical media industry and marks a significant transition for Chicken Soup for the Soul Entertainment, a subsidiary known for its diverse media and entertainment ventures.
