As streaming continues to dominate the home entertainment market, DVD rental service Redbox is set to shut down after 22 years in business.
Redbox’s parent company, Chicken Soup for the Soul Entertainment, changed its Chapter 11 bankruptcy filing last month to a Chapter 7 liquidation filing on Wednesday. The change means the company can’t come up with a repayment plan for its outstanding debts and will soon have to rely on selling assets to repay creditors.
The Chapter 7 bankruptcy filing would result in the firing of all employees and the closure of Redbox’s 24,000 kiosks. Chicken Soup for the Soul’s lawyers told the court they have been working “day and night” to find a solution to avoid the ruling. deadline report.
A current Redbox employee, who asked not to be identified due to the uncertainty of future legal action that some within the company are said to be considering, said the news puts the company in a precarious position.
“The emotions are awful,” he said. “I have colleagues who are behind on rent and facing eviction.”
Employees said at a town hall meeting on Thursday that staff were told they wouldn’t be paid for hours worked so far this month. They also said the layoffs won’t be officially announced until a bankruptcy trustee is appointed, raising concerns about when employees will be able to apply for unemployment insurance.
“There is no way they can continue to pay their employees,” the Delaware judge overseeing the case said Wednesday. The Hollywood Reporter reported. Thursday.
Lawyers for Redbox and representatives for the company did not immediately respond to requests for comment.
Red Box was founded in 2002 and was at its peak. It shook Hollywood Rental services were cheaper than buying DVDs, but the rise of digital services and streaming platforms has led to DVD sales declining. Collapsed In the 2010s.
In 2022, Redbox will Debt: $325 millionwhich was acquired by Chicken Soup for the Soul Entertainment.
The parent company had $1 billion in debt when it filed for bankruptcy last month. Court Documents A report filed earlier this month showed the company was struggling to pay salaries and health insurance for its more than 1,000 employees.
Redbox is the latest physical media company struggling to survive in the dominance of streaming. 99% of US households According to a Forbes survey this year, everyone is paying for at least one of the services. Free ad-supported streaming platformBest buy this year No longer selling physical media They say that digital content such as DVDs and Blu-rays are the result of changes in the way entertainment is consumed.
Meanwhile, streaming hit an all-time high. TV ratings in MayAccording to a recent Nielsen report.
