On July 1st, the parent company of the DVD rental kiosks, Redbox, filed for bankruptcy. While this is not shocking to most, this venture always had warning signs of a short shelf life. But, what were those red flags, and was there any hope Redbox could’ve survived this media apocalypse?
That’s exactly what we are going to explore in this article…
DVDs Joining Other Dearly Departed Media
First, we can address the number one — and almost impossible — obstacle that Redbox faced…
IT’S A VENDING MACHINE FOR RENTING DVDS — AND THAT’S IT.
Which unfortunately for its parent company, Chicken Soup for the Soul Entertainment, is a dying form of media. (Even industry pioneer, Netflix got out of the physical movie business for good last year.)
A fact that is further supported by this Variety article. It reported that DVD sales were down 92% in 2023 from its highest point in the early 2000s.
Believe it or not, that was the least of Redbox’s problems when Chicken Soup bought them…
Redbox Was a Bad Deal from Day One
In 2022, Chicken Soup for the Soul Entertainment bought Redbox from Apollo Global Management for $325 million.
However, according to their Chapter 11 filing the company has $970 million in debts versus $414 million in assets.
And Redbox’s financial burdens seemed to start piling up right out of the gate from…
Lawsuits for unpaid royalties and commissions from big companies like CVS and NBCUniversal…
Additionally, they owe their employees $3.52 million in unpaid wages and another $2.24 million in benefits.
Based on this information, it is unlikely that Redbox ever had a fighting chance. Between dwindling demand for its product and financial mismanagement, it doesn’t look like it will make an underdog comeback.
But, you never know — After all, vinyl records are in again…
Be Great,
GCTV Staff
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