Here’s another reminder of the changing landscape in the entertainment industry. Chicken Soup for the Soul Entertainment, the parent company of Redbox, has filed for bankruptcy. The move sheds further light on the ongoing challenges of physical media in the streaming era.
Deadline reports that Chicken Soup for the Soul Entertainment has filed for Chapter 11 bankruptcy protection. The company, an offshoot of the popular self-help book series, has racked up nearly $1 billion in debt and has struggled to meet payroll and employee benefits obligations.
The bankruptcy court recently authorized the move from Chapter 11 to Chapter 7, clearing the way for the liquidation of assets, according to the Wall Street Journal.
In 2017, Chicken Soup for the Soul Entertainment went public and began a series of acquisitions that included lesser-known digital services like Popcornflix and Crackle.
In 2022, the company acquired Redbox for $375 million. Despite these acquisitions, the company’s financial problems worsened, leaving numerous creditors unpaid. Recent court hearings revealed that even a large cash injection would not be enough to save the company from spiraling into debt.
The judge was also reported to have hinted at possible financial mismanagement within the company. CEO Bart Schwartz resigned just weeks after taking over, adding to the company’s woes.
Redbox was once a dominant player in physical media distribution, boasting over 43,000 locations at its peak in the early 2010s. Today, the company says it operates over 34,000 kiosks that dispense DVDs and Blu-Rays.
However, according to some reports, many of these ATMs are now out of service and in some cases the credit card slots are even covered in tape.
Redbox’s fall highlights the decline of physical media. Retail giants Best Buy and Target have already announced plans to stop selling DVDs and Blu-rays in their stores.
A 2023 report from Digital Entertainment Group revealed that physical media accounted for just 3.6% of U.S. home video revenue, a 25% decline from the previous year.
While I love physical media and continue to buy Blu-rays, I’m not surprised that this trend is on the wane.
by Joey Fear
Source: Geek Tyrant
Lloyd Grunewald is an author at “The Fashion Vibes”. He is a talented writer who focuses on bringing the latest entertainment-related news to his readers. With a deep understanding of the entertainment industry and a passion for writing, Lloyd delivers engaging articles that keep his readers informed and entertained.
