Redbox Goes Out of Business: What it Means for Physical Media

The recent announcement of Redbox going out of business in July 2024 marks a significant turning point for physical media. Redbox’s closure is another sign of the decline of physical media and may make it more difficult to find new movies and TV shows in physical formats.

This also comes at a time when store outlets like Best Buy and Target announced they would discontinue the sale of DVDs and Blu-ray discs in their physical stores and online platforms in 2024.

We are witnessing a major shift to digital media. For some, this is exciting, while for others, it signals the end of an era and nostalgia.

About Redbox

Redbox had been a staple in the DVD rental landscape for over 2 decades, providing convenient access to movies and video games through its iconic red kiosks. However, as streaming services continued to dominate the entertainment industry, the decline of Redbox serves as a stark reminder of the shifting consumer preferences toward digital content.

At its peak, Redbox emerged as a dominant player in the entertainment rental market, boasting an impressive network of 43,000 kiosks across the U.S. and Canada. The staggering annual revenue of $1.97 billion underscores the popularity of Redbox’s model of its time.

The Redbox Kiosk

Imagine walking into your local store and finding a Redbox kiosk filled with the latest releases alongside timeless classics. The process is simple: browse through an extensive selection of titles, make your choice, and rent with just a few taps on the touchscreen.

Redbox stepped up to the plate when Blockbuster Video closed in 2014 and managed to hold on for two decades. The unmistakable red kiosk seemed to be at almost every shopping center and corner.

Up until its closing, there was an undeniable charm and nostalgia associated with holding physical DVD media in your hand. This shift raises important questions about the future of physical media.

With fewer players in the game, we may see an accelerated decline in DVD and Blu-ray sales, leading to limited availability for collectors and enthusiasts who still cherish tangible formats. Netflix shipped its last disc nearly a year ago when it fully shifted to online streaming.

How did Redbox go out of business?

Initially thriving on the convenience of physical DVD rentals from kiosks, Redbox failed to pivot effectively as streaming services like Netflix and Hulu gained traction and fundamentally changed how audiences consumed media.

Additionally, as the pandemic accelerated this shift toward digital consumption, Redbox’s reliance on physical rentals further marginalized its market relevance. Despite attempts to diversify into video game rentals and partnerships with various content providers, these efforts were too little and too late. Ultimately, the company was forced into bankruptcy and liquidation.

At the time of Redbox’s closure, Chicken Soup for the Soul Entertainment (CSSE) was grappling with the staggering reality of nearly $1 billion in debt.

Key points that led to Redbox’s closure:

• Shift to streaming: The rise of streaming services has made it much more convenient for people to instantly access a vast library of movies and TV shows, eliminating the need to visit a physical kiosk to rent DVDs.

• Financial struggles: As DVD rentals declined, Redbox faced mounting debt and struggled to generate enough revenue to survive.
• Chapter 7 bankruptcy:
  Redbox’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 7 bankruptcy, signifying its decision to liquidate assets and shut down operations.

Redbox Apps and Streaming are Offline

As of July 2024, the Redbox apps and website are officially offline due to the company filing for Chapter 7 bankruptcy.  All their services, including streaming and physical rentals, have been shut down and are no longer accessible. Although the app is still listed and available to download, you will get an error when trying to access it.

What will happen to the users who purchased streamed movies from Redbox?

Redbox customers who purchased movies to stream can no longer access their content due to the company’s shutdown. This is because it’s similar to purchasing a license to watch it rather than owning the movie.

This illustrates how purchasing digital content doesn’t necessarily mean you own it, unlike physical media. When consumers buy physical media, such as a DVD or a vinyl record, they possess the tangible item outright. In contrast, digital content is typically governed by licensing agreements that grant users limited rights. This is something to remember the next time you choose to purchase a streaming movie rather than a DVD or Blu-ray.

Redbox may eventually negotiate a deal to transfer purchased movies to another service, but this is uncertain. In the meantime, users seem to be out of luck.

Redbox’s streaming service and mobile app stopped working in mid-July 2024. The Redbox app is no longer available on Roku and is only partially functional on other platforms like Apple’s App Store and Google Play.

What is next for Redbox?

Redbox’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 7 bankruptcy:

• Kiosks
  Many of Redbox’s 26,000 kiosks have been removed. The remaining kiosks continue to operate but will be removed over time.
• Employees
  The company laid off over 1,000 employees, who will not receive severance or extended benefits.
• Online services
  Redbox’s online streaming services and mobile app stopped working in July 2024. While the app is still listed in the Apple and can be installed, you will be greeted with a “connection error” when trying to use it.

Conclusion

As we witness this evolution, consumers and creators alike must consider what is lost when we move entirely away from physical media. The tactile experience of holding a DVD or vinyl record offers something that streaming simply cannot replicate—a sense of ownership and connection that many find invaluable. The closure of Redbox may signify not just a loss for rental culture but also an urgent call to reflect on our relationship with media consumption in an increasingly digital world.