Redbox shuts down DVD kiosk-rental business after Chicken Soup for the Soul

Redbox is no more.

The DVD kiosk-rental business is shutting down after its parent company converted its bankruptcy filing to Chapter 7 liquidation.

The number of Redbox kiosks had grown to about 34,000 across the US, largely located at grocery and drug stores. Since its 2002 launch, Redbox had rented its 1 billion discs at prices cheaper than cable, according to its website.

Chicken Soup for the Soul Entertainment, which owns Redbox, was nearly $1 billion dollars in debt and owes millions of dollars to several entertainment companies.

Variety reported the company’s 1,000 employees are losing their jobs without any severance or extended benefits.

Chicken Soup for the Soul Entertainment failed to pay employees and vendors for at least four weeks prior to its Chapter 11 filing last month.

The parent company of the distinctive, red-colored kiosks at grocery stores, filed for bankruptcy after enduring months of financial struggle.

The company revealed in the filing that it has nearly $1 billion in debt and owes millions of dollars to several entertainment companies including the BBC and Sony Pictures, plus to retailers ranging from Walmart to Walgreens.

Filings show that the company took on about $325 million in debt following its purchase of Redbox in 2022 from private equity giant Apollo Global Management. The plan was to make it into an entertainment conglomerate, combining the DVD rental business with its free streaming services, like Crackle, the entertainment platform once owned by Sony.

Those plans didn’t pan out, hindered by dual Hollywood strikes that limited production of fresh content and the decline of people renting physical DVDs that even forced rival Netflix to quit that part of its business last year.

CSSE declined to comment.

Deadline also previously reported that Redbox hadn’t paid employees for a week, and medical benefits have been suspended. Filing for Chapter 11 bankruptcy could help the company fix those issues if its plans are approved by a court in Delaware.

The company’s publishing arm, which produces those ubiquitous self-help books that were once a worldwide phenomenon, isn’t affected by the bankruptcy filing of its entertainment unit.

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