Redbox’s Parent Company Chicken Soup for the Soul Entertainment Filed for Bankruptcy

Chicken Soup for the Soul Entertainment, the parent company of the CD/DVD rental company Redbox, demonstrated once again the strong position of its streaming services by filing for bankruptcy. The parent company applied for Chapter 11 bankruptcy protection on Saturday. Chicken Soup for the Soul Entertainment has nearly $1 billion in debt and is facing issues with being able to pay its employees’ salaries and benefits.

Having gone public in 2017 and acquiring various digital services, the company purchased Redbox in 2022 for $375 million after acquiring platforms like Popcornflix and Crackle. Redbox was known for its video rental services as well as its automated machines for physical media distribution. The company burdened with debt under Chicken Soup for the Soul Entertainment may sell Redbox to an interested buyer.

Redbox had over 43,000 locations in the early 2010s and reportedly still has over 34,000 locations distributing DVDs and Blu-Rays. However, with some machines being shut down and a decline in physical media, the future of Redbox remains uncertain.

The Decline of Physical Media

Redbox’s situation is indicative of the decline in physical media consumption. Retail giants like Best Buy and Target decided to end DVD and Blu-Ray sales last year. Similarly, Netflix completely discontinued its physical media rental service.

According to the 2023 report from the media industry analysis group Digital Entertainment Group, only 3.6% of home video revenue in the US comes from physical media, a 25% decrease compared to the previous year. Digital platforms and streaming services are increasingly taking the place of physical media.