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Media giant follows Blockbuster into oblivion leaving thousands of staff without jobs
Redbox - the once highly popular movie rental service and rival to Blockbuster - is to see its brightly colored kiosks disappear for good from outside grocery stores and drugstores.
The age of Americans streaming movies on demand from a raft of services has claimed another victim.
The parent company Chicken Soup for the Soul Entertainment filed for Chapter 11 bankruptcy protection at the end of June, hoping to refinance nearly $1 billion in debt.
But on Wednesday, a court heard that lenders were unwilling to put up more money so it is now shutting down under a Chapter 7 bankruptcy.
All 27,000 rental kiosks will be closed and then removed as it looks to sell of its assets to bring in cash. All 1,033 employees will lose their job without any payoff.
Redbox is known for its self-service DVD kiosks outside grocery stores and pharmacies
The company owes millions of dollars to over 500 creditors - including major retailers Walgreens and Walmart and entertainment giants such as the BBC, Sony Pictures and Warner Bros.
At its height in 2013, Redbox had annual sales of $1.97 billion and once had 43,000 kiosks in the US and Canada.
The company bought Redbox in 2022, which is famous for its red self-service DVD machines that sit outside stores. Redbox was founded in 2002, when the DVD business was booming.
The bankruptcy is the latest victory for major streaming services as they continue their domination of the entertainment landscape.
Filings show that CSSE took on around $325 million in debt when it purchased Redbox from private equity company Apollo Global Management.
The plan with the purchase was to transform it into an entertainment conglomerate.
CSSE aimed to combine Redbox's DVD rental business with its streaming services, including Redbox Live TV and Crackle, which was previously owned by Sony.
Those plans did not pan out, however, deterred by last year's Hollywood strikes which limited the creation of new content, and the drop in people renting physical DVDs.
In the filing, CSSE reported it currently operates around 27,000 Redbox kiosks across the US.
This is down from around 36,000 when it acquired the company in August 2022.
Video rental chain Blockbuster filed for bankruptcy protection in 2010.
Streaming giant Netflix announced it was ending its DVD mailing service in September 2023.
The company said it had sent out more than 5.2 billion discs in its famous red envelopes since 1998, but physical copies of movies and TV shows had become increasingly redundant.
According to the filing, CSSE had around $414 million in assets and $970 million in debts as of March 2024.
Over the last year, shares in the Connecticut-based company have plummeted more than 90 percent.
In court documents, the company said its lenders were unwilling to cooperate with refinancing.
Deadline previously reported that Redbox had not paid employees for a week, and their medical benefits had also been suspended.
The publishing arm of the company, famous for its self-help books, is not affected by the bankruptcy filing.
Redbox's DVD rental service has 27,000 of the kiosks dotted around America
Video rental chain Blockbuster filed for bankruptcy protection in 2010
DVD sales have been on the decline for years, amid the meteoric rise in online streamers such as Netflix, Amazon and Apple TV.
Sales of the discs peaked in 2005, and have long been surpassed by streaming services.
But competition among these major companies is also heating up - meaning many are being forced to up their prices for customers.
Last week, Paramount announced that it would be hiking the price of its streaming service, as it looks to boost falling profits.
Warner Bros. Discovery has also angered customers by raising the price of its ad-free Max subscription for the second time.
The $1 price rise to $16.99 a month for the ad-free tier took effect last month for new subscribers.