The encyclopedia · Strategy & Leadership · Strategic decision · 2024
Redbox's 24,000 DVD kiosks went dark in a day — 1,033 jobs, no severance
Redbox's 24,000 DVD kiosks — the last mass rental counters in America — went dark in July 2024 when its parent ran out of cash
Redbox · Chicken Soup for the Soul Entertainment · 2024
What happened
Redbox put DVD rental kiosks in supermarkets and drugstores from 2002, peaking in 2013 with US$1.97 billion in revenue and more than 43,000 kiosks across the United States and Canada. Streaming ate the format for a decade, but by 2024 Redbox still ran about 24,000 kiosks — the last mass DVD rental counter in America.
In August 2020 Chicken Soup for the Soul Entertainment bought Redbox for about US$370 million, assuming US$359.9 million of its debt. The bet was that kiosk rentals would partly recover once theatrical releases returned after COVID — the company's own plan expected kiosk demand at about one-third of 2019 levels.
The recovery never came. CSSE missed payrolls for weeks, employees lost medical benefits, and the company filed for Chapter 11 on June 28, 2024 with US$970 million in debts against US$414 million in assets. Its top lender alleged gross mismanagement.
On July 10, 2024 the bankruptcy converted to Chapter 7 liquidation: all 24,000 kiosks went dark, the streaming services shut down, and all 1,033 employees lost their jobs with no severance.
Why it happened
- The buyout priced a dying format: revenue had fallen from the 2013 peak for seven straight years, and the $370M deal assumed a 'partial return to pre-COVID' rental demand that never came.
- Debt turned a slow sunset into a sudden death: CSSE loaded the deal with $359.9M of assumed debt, missed payrolls, and filed Chapter 11 with $970M of liabilities in June 2024.
- The kiosks had no moat left: streaming had already taken convenience, and the company's own plan expected kiosk rentals at about one-third of 2019 levels.
- Chapter 7 was the only endgame: with liquidation, 24,000 kiosks were scrapped rather than sold — the network was worth more dead than alive.
The lesson
A leveraged acquisition of a declining format multiplies the decline: the debt from the buyout turned a slow-motion sunset into a sudden liquidation.
Sources
- NY Post | Redbox shutting down 24K kiosks after parent company's bankruptcy filing
- Variety | Redbox Business Is Shutting Down With Chapter 7 Bankruptcy Liquidation
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