Redbox isn’t a story of rags to riches; instead, it is a story of a company that started as a project of McDonald’s, reached its heights by opening 42,000 kiosks at more than 34,000 locations, and faced a decline. But did this decline really made Redbox shut down its business? Is Redbox going out of business in 2023?
Keep on reading to find out how Redbox is doing currently and whether it is really going out of business or is just another piece of the buzz.
Is Redbox Going Out Of Business in 2023?
No, Redbox is not going out of business.
It’s been a long journey for Redbox Automated Retail LLC, from being a popular DVD rental to being a company experiencing exponential loss.
The company also tried to adapt to the chain marketing trends, that is- switching from renting DVDs via kiosks to delivering on-demand videos but to no avail.
At last, the company decided to get acquired by Chicken Soup For The Soul Entertainment.
In July 2023, the company announced its partnership with the video-streaming platform TikTok. Under this partnership, the screens that showcase the top content from the service will be installed on at least 3,000 kiosks of Redbox.
Who Are The Top Shareholders Of Redbox?
The table below represents the institutional shareholders who hold the majority of shares in Redbox.
| OWNER | SHARES OWNED | SHARE CHANGE | DATE REPORTED |
|---|---|---|---|
| Apollo Management Holdings, L.P. | 34,526,487 | 0 | 2022-06-30 |
| Vanguard Group Inc | 570,124 | 151,712 | 2022-06-30 |
| JANE STREET GROUP, LLC | 265,113 | 243,076 | 2022-06-30 |
| Geode Capital Management, LLC | 132,448 | -13,421 | 2022-06-30 |
| State Street Corporation | 114,871 | 66,307 | 2022-06-30 |
| Northern Trust Corp | 56,541 | 38,734 | 2022-06-30 |
| Bridgeway Capital Management, LLC | 35,000 | -35,000 | 2022-06-30 |
| AllianceBernstein L.P. | 33,900 | 33,900 | 2022-06-30 |
| Millennium Management LLC | 32,750 | -86,555 | 2022-06-30 |
| Susquehanna International Group, LLP | 28,394 | 28,394 | 2022-06-30 |
| Two Sigma Advisers, LLC | 22,900 | 22,900 | 2022-06-30 |
| Qube Research & Technologies | 21,319 | 21,319 | 2022-06-30 |
| Citigroup Inc | 20,079 | 18,879 | 2022-06-30 |
| Cutler Group LP | 19,217 | 19,217 | 2022-06-30 |
| Charles Schwab Investment Management Inc | 18,195 | 18,195 | 2022-06-30 |
| Bank of New York Mellon Corp | 17,550 | 17,550 | 2022-06-30 |
| HRT FINANCIAL LLC | 12,285 | 12,285 | 2022-06-30 |
| SG Americas Securities, LLC | 10,288 | 10,288 | 2022-06-3 |
The Acquisition Of Redbox
In 2016, the parent company Outerwall was seeking a buyer based on shareholder input. Then in September, Outerwall was taken private by Apollo Global Management, resulting in the splitting of the three units Coinstar, Redbox, and ecoATM into three separate units.
This was the first breakdown of the company after the company was struggling to survive in the market. The company’s revenue fell 20% in 2019, 36% in 2020, and over 50% in 2021.
Redbox reported EBITDA -$15 million in 2021, which was down from $114 million in 2020. This made Redbox go public again via a merger with Seaport Global Acquisition, a special-purpose acquisition company. This resulted in Redbox being publicly listed on NASDAQ under the ticker name RDBX.
In May 2022, Redbox was finally acquired by a company that had already cracked the code of launching online video services- Chicken Soup For The Soul Entertainment. The company acquired Redbox for $375 million.
The company is now planning to increase its number of outlets with 1,000 more kiosks in 2023.
How Much Does It Cost To Own A Redbox Franchise?
To own a Redbox franchise, you need an investment of $380,000 to $453,000 and a franchise fee of $49,500.
There are also other franchise requirements of Redbox; however, it is private information. The Corporation has not made it public; you’ll only find out when you’ve applied for the franchise.
All requirements will be explained once the basic conditions have been met.
How Does Redbox Still Exist?
About Redbox And How It Started
Redbox Automated Retail LLC. is an American video-on-demand streaming and video rental company specializing in DVD, Blu-ray 4k UHD rentals and purchases.
Redbox kiosks feature the company’s signature red color and are located at convenience stores, fast food restaurants, grocery stores, mass retailers, and pharmacies.
Initially, Redbox was developed in Chicago as a part of ‘Project 361,’ a McDonalds business expansion initiative. John Sexton Abrahim, a strategy executive at McDonald’s, designed the original concept to provide 24/7 access to fresh dairy and other products.
But later, these kiosks were turned into DVD rentals which was tested in Denver in 2004. It came with a new strategy of ‘return anywhere,’ which allowed its customers to return the DVDs at any Redbox kiosks.
In 2007, the company surpassed Blockbuster in the number of US locations and passed 100 million rentals in February 2008. By September 2010, Rebox passed 1 billion rentals and was in the game with competitors like Netflix, Blockbuster, and Movie Gallery.
Fast forward to 2023, Redbox is one of the most recognizable names in the home entertainment industry. Its kiosks are easy to find and provide customers with outstanding options for movies and video games.
What Are The Services Offered By Redbox?
Here are a few services offered by Redbox:
1. Redbox Free Live TV
This is an ad-supported channel-based video-on-demand service. The service was nationally launched on February 18.
Nearly 30 channels were launched, with 3 being self-branded channels named Redbox Rush (action and adventure), Redbox Comedy, and Redbox Spotlight. The content partner was Lionsgate, while other content suppliers included
- America’s Funniest Home Videos,
- Cinedigm,
- Comedy Dynamics Fremantle,
- Film Rise, Gravitas,
- Jukin Media,
- Kabillion,
- Maverick Movies,
- People Are Awesome,
- TMZ, and
- USA Today.
2. Redbox Instant
Redbox Instant was dubbed in July 2012 and was a joint effort between Redbox and Verizon. It officially went public, offering a free 1-month trial of an $8/month unlimited streaming service that included 4 disc rentals from kiosks.
In June 2013, Sony made the official announcement that Redbox Instant will be available on PlayStation 4 console.
However, in Q2, Outerwall, Redbox’s parent company, announced that they were “not pleased” with Redbox’s instant subscription numbers. This led to the shutdown of Redbox Instant only 19 months after it was initially launched.
3. Redbox On Demand
After the shutdown of Redbox Instant, the company launched another service named Redbox On Demand. It was launched with a different model, which doesn’t require any membership and contains new releases and several titles that were never available on platforms like Netflix.
The titles come from a major film studio’s library except for Disney plus Lionsgate.
4. Redbox+
Redbox+ was based on a yearly subscription model, allowing a subscriber to rent 12 or 24 discs, depending on their plan of choice. It also extended the user return window up until midnight and gave an additional 3 hours to return the disc to the original Redbox kiosk.
Conclusion
Is Redbox going out of business?
The answer to this question is simple No, Redbox is not going out of business. Although it has faced many ups and downs, but it is now in good hands. The company has been acquired by Chicken Soup For The Entertainment company for a $375 million deal.
However, you might see less number of Redbox kiosks, but the company is planning to increase the number of outlets with 1,000 more kiosks by 2023.
We hope this article has provided every information on the Redbox shutdown and cleared all the chaos of the market.
FAQs
Why are Redbox kiosks are disappearing?
Due to the slumping sales and increasing digital competition, Redbox has to close nearly 1,000 of its kiosk locations. But it is planning to be back in the market with increasing the number of kiosks.
What is Redbox Controversy?
Disney claimed that Redbox was guilty of selling download codes for Disney titles like Star Wars, Beauty and The Beast.
Does Redbox still make money?
Redbox reported to make 253.4 million in kiosk rental revenue in 2021. The company generated $35.1 million in digital revenue, but it was less as compared to $39.7 million in 2020.