Redbox Shut Down – An Obituary

By | November 12, 2024
redbox kiosk

Redbox Shuts Down

Yes, Redbox is shutting down after its parent company, Chicken Soup for the Soul Entertainment (CSSE), filed for Chapter 7 bankruptcy in July 2024: 

History of Redbox

  • My kiosk company actually turned them down when the first sought manufacturers. No ROI
  • Eventually they made their way to FLEX (big supply chain)
  • Redbox Automated Retail, LLC, commonly known as Redbox, was founded in 2002 by Gregg Kaplan. Initially developed as part of a McDonald’s business expansion initiative, Redbox started with automated DVD rental kiosks. The concept was tested in Denver in 2004 and quickly gained popularity due to its convenience and affordability.In 2005, Coinstar (later known as Outerwall) acquired a 47% stake in Redbox, eventually buying the remaining shares by 2009. Redbox expanded rapidly, with kiosks located at convenience stores, supermarkets, and pharmacies across the United States. At its peak in the early 2010s, Redbox operated over 34,000 kiosks and controlled more than half of the U.S. DVD rental market.However, the rise of digital streaming services led to a decline in physical DVD rentals. In 2016, Apollo Global Management acquired Outerwall, including Redbox. In 2022, Chicken Soup for the Soul Entertainment purchased Redbox, but the company faced financial difficulties and filed for Chapter 11 bankruptcy in June 2024. The case was converted to Chapter 7 liquidation the following month, leading to the cessation of Redbox’s online streaming services and the removal of many kiosks
  • Redbox actually spawned Blockbuster kiosks which was NCR entry into DVD vending. Eventually NCR gave up.
Good links
  • Fast Company – Redbox closing down: What happens to kiosks, employees?
  • IGN — Redbox Officially Shutting Down, Spelling the End of Thousands of DVD Rental Kiosks Across the U.S.

  • Kiosks

    Many of Redbox’s 26,000 kiosks have been removed, but the remaining ones will continue to work for the time being. 

  • Online services

    Redbox’s online streaming services and mobile app stopped working in July 2024. 

  • Employees

    Over 1,000 employees were laid off and will not receive severance or extended benefits. 

Redbox’s closure is due to a number of factors, including:
  • Competition

    The rise of streaming platforms and digital offerings led to a decline in DVD sales in the 2010s. 

  • Debt

    CSSE acquired Redbox in 2022 for $375 million, but the company’s debt grew to nearly $1 billion. 

Mismanagement

CSSE was accused of gross mismanagement, including failing to pay employees and payroll taxes, and cutting employee health insurance.

Redbox was founded in 2002 and was known for its bright red touch-screen movie-rental machines. At its peak, Redbox had 43,000 kiosks in the U.S. and Canada and an annual revenue of $1.97 billion.

Blockbuster, once a giant in the video rental industry, ventured into the DVD kiosk market in the late 2000s to compete with the rising popularity of Redbox. These kiosks were designed to offer a convenient way for customers to rent DVDs without needing to visit a traditional store.

Key Points in the History of Blockbuster DVD Kiosks:

  1. Launch and Expansion: Blockbuster introduced its DVD rental kiosks in 2008, aiming to provide an alternative to Redbox’s successful model. The kiosks were placed in various locations, including grocery stores and pharmacies.
  2. Partnerships: Blockbuster partnered with NCR Corporation to manufacture and deploy the kiosks. This collaboration aimed to rapidly expand the number of kiosks available to consumers.
  3. Competition and Challenges: Despite the initial push, Blockbuster’s kiosks struggled to gain significant market share against Redbox, which had already established a strong presence.
  4. Decline: As Blockbuster faced financial difficulties and filed for bankruptcy in 2010, the focus on kiosks diminished. The company continued to close stores and reduce its footprint in the market.
  5. End of an Era: By 2013, Blockbuster announced the closure of its remaining company-owned stores and the end of its DVD-by-mail service, marking the decline of its kiosk operations as well.

Blockbuster’s attempt to enter the DVD kiosk market was a notable effort to adapt to changing consumer preferences, but it ultimately couldn’t compete with the convenience and established presence of Redbox

Related Redbox Kiosk Links

Author: Staff Writer

Craig Keefner -- With over 40 years in the industry and technology, Craig is widely considered to be an expert in the field. Major early career kiosk projects include Verizon Bill Pay kiosk and hundreds of others. Craig helped start kioskmarketplace and formed the KMA. Note the point of view here is not necessarily the stance of the Kiosk Association or kma.global