Redbox, the company that provided DVD rentals through a series of automated kiosks, will be shutting down as part of its parent company’s ongoing bankruptcy proceedings. Chicken Soup for the Soul Entertainment, who bought Redbox in 2020, will be closing the company down, effectively displacing all 1,033 of its workers without any severance or further compensation.
The company’s 24,000 DVD rental kiosks are being shut down and the company’s online streaming service is having its plug pulled as part of Chicken Soup for the Soul Entertainment’s Chapter 11 bankruptcy case has now been converted to a Chapter 7 liquidation proceeding as of yesterday.
The DVD rental kiosk that would become Redbox was initially developed by McDonalds in 2004, spinning out of another kiosk-driven business idea that did not pan out. McDonalds would sell 49% of the company to Coinstar in 2004 and by 2009, Coinstar would buy out the remaining 51%. Redbook found it uniquely positioned to fill the spot for physical DVD rental after the rising of rental-by-mail outfit Netflix had pretty much decimated national brick and mortar chains like Blockbuster and Hollywood Video. By 2011, it was estimated that Redbox accounted for just over a third of all disc rentals with 68% of Americans living within a five-minute drive of a Redbox kiosk.
In 2013, the company’s rental business peaked, with 772.87 million units rented that year. However, the company could not totally stem the tide of consumers switching their viewing habits from disc rental to online streaming. The addition of blu-ray disc as well as discs for the X Box and PlayStation gaming systems slowed the company’s overall rental decline, while the December 2017 launch of the Redbox On Demand streaming service did give them a temporary boast. However, it was only delaying the inevitable. After the company’s overall revenue dropped by 50% in 2021, it was acquired by Chicken Soup for the Soul Entertainment. That company was unable to reverse Redbox’s downwards trend and finally filed for bankruptcy earlier this month.
