In a significant move impacting the entertainment industry, Redbox, known for its ubiquitous DVD rental kiosks, will shutter all operations following the decision by its parent company, Chicken Soup for the Soul Entertainment, to liquidate its assets.
The decision marks a dramatic turn after Chicken Soup for the Soul Entertainment initially filed for Chapter 11 bankruptcy but later converted the case to Chapter 7 liquidation, a move that will effectively terminate all operations. This development has resulted in the termination of employment for over 1,000 employees associated with the company, who will reportedly not receive severance pay.
Redbox, once a prominent player in the movie rental market, has faced declining fortunes in recent years as streaming services have surged in popularity. According to reports from Variety, the company’s peak revenue of $1.97 billion USD was recorded in 2013 when it operated over 40,000 kiosks across the United States and Canada.
In its bankruptcy filing, Chicken Soup for the Soul Entertainment disclosed debts totaling $970 million USD, owed to major Hollywood studios including Universal Studios, Sony Pictures, Warner Bros., Paramount Pictures, Lionsgate, as well as retail giants Walgreens and Walmart.
The company’s troubles are compounded by ongoing investigations triggered by allegations of self-dealing and mismanagement by one of its controlling shareholders, William J. Rouhana Jr. One of the lenders, HPS Investment Partners, has accused Rouhana of failing to fulfill financial obligations such as employee salaries and health benefits.
The closure of Redbox kiosks marks the end of an era for DVD rentals in North America, highlighting the seismic shift towards digital streaming platforms that have reshaped consumer habits in the entertainment sector.
For further updates and details, stakeholders are encouraged to monitor developments from Chicken Soup for the Soul Entertainment and Redbox.
