Another victim of streaming services falls as Redbox’s parent company Chicken Soup for the Soul Entertainment files for bankruptcy.
The parent company filed for Chapter 11 bankruptcy protection on June 29, according to a report from Deadline. Chicken Soup for the Soul Entertainment, a spinoff company named after the popular self-help books, racked up almost $1 billion of debt and had issues paying employees and covering their benefits. On Wednesday, the bankruptcy court allowed that Chapter 11 to change to a Chapter 7 bankruptcy, which means the company’s assets can start being liquidated, according to the Wall Street Journal.
Chicken South for the Soul went public in 2017 and began acquiring some of the lesser-known digital services such as Popcornflix, Crackle, and then Redbox in 2022 for $375 million. The company has a lot of lenders to pay back, and the latest court hearing indicates that an injection of cash wouldn’t help pull the company out of the massive amount of debt. The judge also noted that there might have been a possible misappropriation of funds. Chicken Soup for the Soul Entertainment’s CEO Bart Schwartz stepped down from his position just weeks after getting the job.
In its heyday in the early 2010s, Redbox had more than 43,000 locations. The company’s site says it still has more than 34,000 kiosks doling out DVDs and Blu-Rays, but some machines have been reported as being unplugged with credit card slots having tape over them.
Redbox’s demise is another indicator that physical media is becoming a thing of the past. Best Buy and Target announced in the past year that physical stores will no longer sell DVDs and Blu-Ray discs. Netflix started its business by sending out DVDs via mail and discontinued its physical media service last year. In its 2023 report, Media industry analysis group Digital Entertainment Group said physical media made up 3.6%of the U.S. home video revenue for the year, a drop of 25% from the year before.
