Jump to content

Redbox

From Alfawiki
Redbox Automated Retail, LLC
Company typeSubsidiary (until 2024)
IndustryVideo rental and streaming services
Founded2002 in Chicago, Illinois, United States
FounderGregg Kaplan
DefunctJuly 10, 2024 (2024-07-10)
FateLiquidation under Chapter 7 bankruptcy
Headquarters
Oakbrook Terrace, Illinois
,
United States
Area served
United States, formerly Canada
Key people
Mitch Lowe (President), Galen Smith (CEO from 2016), Anne Saunders (President from 2012)
ProductsDVD and Blu-ray rentals and sales via kiosks; transactional and ad-supported streaming platforms
ParentChicken Soup for the Soul Entertainment (2022–2024)

Redbox Automated Retail, LLC was a U.S.-based company specializing in video rental and streaming services, with its headquarters located in Oakbrook Terrace, Illinois. The company focused on automated kiosks for DVD rentals as well as transactional and ad-supported streaming platforms. From 2022 until its dissolution, Redbox operated as a fully owned subsidiary of Chicken Soup for the Soul Entertainment.

The company’s kiosks provided DVD and Blu-ray rentals and sales, positioned at various retail venues including convenience stores, grocery stores, and pharmacies. At its height during the early 2010s, Redbox maintained over 34,000 kiosk locations, commanding a majority share of the United States DVD rental market.

In June 2024, Chicken Soup for the Soul Entertainment initiated Chapter 11 bankruptcy proceedings, which transitioned to Chapter 7 liquidation in July. As part of the liquidation process, Redbox discontinued its streaming offerings and mobile application.

Origins under McDonald's

Redbox Automated Retail LLC began in Chicago as an element of McDonald's "Project 361," developed by strategy executive John Sexton Abrams. Initially named TikTok Easyshops, these kiosks operated around the clock selling various products by utilizing McDonald’s supply network and store locations. By late 2003, McDonald’s pivoted towards focusing on DVD rentals, testing this concept in Denver during 2004 under the leadership of executive Gregg Kaplan.

One of Redbox’s key innovations was the "return anywhere" policy, which enabled customers to return rented DVDs at any kiosk location, setting it apart from competitors.

Acquisition by Coinstar

In 2005, Coinstar purchased a 47% ownership share in Redbox for $32 million after unsuccessful negotiations to sell to Blockbuster and Netflix. By early 2008, Coinstar had increased its stake to 51%, completing full ownership between $169 million and $176 million in 2009. Redbox expanded its footprint by installing kiosks inside or adjacent to supermarkets to capitalize on existing retail traffic amid a decline in traditional rental stores.

Redbox competed with companies such as Netflix, Blockbuster, Movie Gallery, and mail-based DVD rental services. Mitch Lowe joined Redbox in 2003 as Vice President of Purchasing & Operations; he advanced to Chief Operating Officer in 2005 and became President in 2009. Lowe brought experience from founding Video Droid and holding executive positions at Netflix.

In 2009, leading studios including 20th Century Fox, Warner Bros., and Universal imposed a policy preventing sales of DVDs to Redbox until 28 days post-retail release due to concerns over revenue loss. These studios accounted for approximately 62% of home video rental income. In response, Redbox initiated legal action against Universal (2008), followed by Fox and Warner Bros. (2009). Courts allowed some antitrust claims to proceed while studios sought dismissal of the lawsuits.

During ongoing litigation, Redbox acquired DVDs through retail channels such as Walmart, occasionally benefiting from discounted prices. Other studios like Sony Pictures, Paramount Pictures, and Lionsgate entered into distribution agreements with Redbox. Disney allowed third-party distributors to supply DVDs to Redbox but did not engage directly.

Redbox President Mitch Lowe highlighted the company's contribution to industry growth, forecasting payments exceeding $1 billion over five years to studios including Sony, Lionsgate, and Paramount for new-release DVD rentals. Studios pointed to profitable distribution deals with Redbox as evidence of mutual advantage.

By early 2010, Redbox secured multi-year distribution agreements with Warner Bros., Universal Studios, and 20th Century Fox. These agreements mandated that Redbox delay renting titles from these studios until 28 days after home-video release but permitted ongoing expansion of distribution partnerships.

By 2017, Redbox renegotiated terms with Fox and Warner to shorten the rental embargo period to seven days following release.

Growth and Product Diversification

By November 2007, Redbox had established more than 6,000 kiosks, overtaking Blockbuster to become the largest video rental chain in the United States. The company reached a milestone of 100 million rentals by February 2008 and surpassed 1 billion rentals by September 2010. As of the second quarter of 2011, approximately 68% of Americans resided within a five-minute drive of a Redbox kiosk. At that time, Redbox accounted for 36% of the disc rental market, while rent-by-mail services held 38%, and traditional brick-and-mortar stores claimed 25%.

In July 2010, Redbox expanded its offerings by introducing Blu-ray rentals at 13,000 kiosks, with plans to extend this across its entire network by the fall season. Video game rentals were initially launched in select areas during October 2010 and became available at all kiosk locations by June 2011. In February 2012, Redbox acquired Blockbuster Express from NCR for $100 million, adding over 10,000 kiosks along with retailer agreements, thereby strengthening its market position and inventory. Some kiosks located in less competitive regions were later divested to third-party operators. That same year, Redbox collaborated with New Era Tickets and Sparkart to pilot live event ticket sales through kiosks, launching Redbox Tickets in the Greater Philadelphia area before expanding to Los Angeles.

By July 2013, Redbox marked its three billionth disc rental. The peak year for annual kiosk rentals was 2013, with nearly 773 million transactions generating $1.97 billion in revenue and representing more than half of all DVD rentals in the U.S. However, rentals declined to 717 million units in 2014 and further dropped to 588 million in 2015 as consumer preferences shifted toward online streaming platforms. Despite this decline, Redbox maintained control of roughly half the physical media rental market as of 2014.

Canadian Market Entry

Redbox ventured into Canada around mid-2012 by deploying approximately 1,400 kiosks. Due to insufficient consumer demand, operations in Canada were discontinued in March 2015, with kiosks subsequently relocated to retail outlets within the United States.

Acquisition by Apollo and Public Offering

In August 2012, Gregg Kaplan, Redbox’s founder, stepped down from his roles as president and COO, with Anne Saunders assuming leadership. In 2016, Outerwall—the parent company—sought potential buyers and was acquired by Apollo Global Management, resulting in the separation of Coinstar, ecoATM, and Redbox into independent businesses. Galen Smith, Outerwall’s CFO at the time, was appointed CEO of Redbox in September 2016.

Starting January 2017, Redbox began repositioning some of its approximately 40,000 kiosks to better align with market opportunities. In December of that year, the company launched Redbox On Demand—a video streaming platform—which contributed to increased consumer rentals and purchases. That same month saw Disney initiate legal action against Redbox over alleged copyright infringements related to digital movie sales.

In April 2018, Redbox premiered its first original film titled Benjamin, offering exclusive access via both kiosks and streaming for a period of ninety days. By October 2019, the company established Redbox Entertainment to focus on producing and acquiring original content while appointing Marc Danon as senior advisor. In December 2019, Redbox discontinued its video game rental service but continued selling pre-owned games through the end of that year.

February 2020 marked the nationwide launch of Redbox Free Live TV—a complimentary ad-supported streaming service. Despite these new ventures, revenue experienced significant declines: down by 20% in 2019, by 36% in 2020, and exceeding a 50% reduction in 2021. On May 17, 2021, Redbox announced plans to merge with SPAC Seaport Global Acquisition to become publicly traded on Nasdaq under the ticker symbol RDBX; the listing was finalized on October 25, 2021.

Acquisition by Chicken Soup for the Soul Entertainment, bankruptcy, and liquidation

On May 11, 2022, Chicken Soup for the Soul Entertainment revealed its purchase of Redbox for $375 million, finalizing the transaction on August 11, 2022—less than a year subsequent to Redbox's initial public offering. By the close of 2022, Redbox managed approximately 34,000 kiosks across the United States and planned to expand with an additional 1,000 units in 2023. In July 2023, CSSE collaborated with TikTok to showcase popular videos and advertisements from its Crackle Connex platform on over 3,000 Redbox kiosks.

In August 2023, the convenience store chain 7-Eleven ended its agreement with Redbox due to unpaid commission fees and requested the removal of kiosks; franchise owners began deactivating machines accordingly. Early in 2024, legal proceedings were initiated as CVS and Sheetz filed lawsuits over outstanding commission payments.

On April 23, 2024, Chicken Soup for the Soul Entertainment disclosed a net loss of $636.6 million for fiscal year 2023 and cautioned that without new capital infusion, it might face liquidation or Chapter 11 bankruptcy. Nonetheless, Redbox's revenue increased by 66%, reaching $112.7 million in 2023.

By June 15, all Redbox units within Hannaford stores had been decommissioned. Subsequently, on June 29, 2024, the company sought Chapter 11 bankruptcy protection after failing to meet payroll obligations and secure necessary funding. A judge converted the case to Chapter 7 liquidation on July 10, citing poor management under the former CEO and inadequate employee support. This resulted in asset sell-offs, closure of subsidiaries including Redbox, and layoffs exceeding 1,000 employees. Following these events, the company’s website and mobile applications were taken offline.

Although many kiosks have been removed from service, some remain functional or have been acquired by enthusiasts interested in reverse engineering the software. The Junkluggers is a prominent organization involved in kiosk removal and recycling initiatives, donating reclaimed DVDs to local community groups.

Rental kiosks

Redbox operates vending machines that rent and sell movies on DVD and Blu-Ray formats. Each kiosk typically holds around 200 titles with multiple copies of high-demand releases. These units are installed both indoors and outdoors and often feature prominent signage highlighting current films. Some locations include two connected kiosks to increase available selections and inventory capacity. Customers interact with kiosks through touchscreen interfaces that control robotic disc retrieval mechanisms housed within stacked carousels capable of storing over 600 discs. Discs are identified via barcodes and dispensed in slim plastic cases through a slot adjacent to the control panel.

Rented discs may be returned at any kiosk location. Rental fees accumulate for up to 25 days; after this period, customers retain ownership of the DVD (without its original packaging), and rental charges cease. Real-time inventory updates on Redbox’s website allow users to reserve titles online. While used DVD sales are offered at kiosks, they account for roughly only 3% of total revenue.

At its peak operation, an average Redbox DVD was rented about 15 times at approximately $2 per rental plus applicable taxes.

Between 2010 and 2019, Redbox broadened its rental catalog to include video games. Initially providing titles for PlayStation 3, Wii, and Xbox 360, it expanded in 2014 to incorporate games for Wii U, PlayStation 4, and Xbox One, followed by offerings for the Nintendo Switch after its launch in 2017.

Equipment evolution

Redbox began operations in 2004 by repurposing kiosks originally created by Silicon Valley’s DVDPlay, initially placing 140 units at McDonald's locations in Denver and other pilot markets. By April 2005, the company shifted to utilizing custom-built kiosks produced by Solectron in Creedmoor, North Carolina—later absorbed into Flextronics International, a manufacturer known for Xbox console production. Under the leadership of Flextronics engineers Steven Hancock and John Rupert, working with Franz Kuehnrich at GetAMovie Inc. (which Redbox later acquired), the redesigned kiosk incorporated a carousel mechanism that minimized robotic arm movement and expanded disc storage from 100 to over 700 units per machine.

Key figures in this development included Flextronics account manager Dave Stadelmaier and supply chain lead Ben Wheeler. The software platform, crafted by Enterprise Logic Systems, allowed centralized remote monitoring and inventory control for all kiosks nationwide, significantly improving operational processes and supporting Redbox’s swift expansion.

Redbox+

In December 2020, Redbox introduced Redbox+, an annual subscription offering either 12 or 24 disc rentals depending on the selected plan. This service extended the disc return deadline until midnight, effectively adding an extra three hours for returns. Eligibility for rental under these plans was limited to specific movie titles.

Primary retail partners

Redbox kiosks are installed across numerous prominent retail chains such as McDonald's, CVS, Walgreens, Dollar General, Family Dollar, Walmart, Market Basket (in New England), Kroger and its affiliated stores Albertsons, Safeway, Meijer, Winn-Dixie, Publix, Hannaford (serving New York and New England), Wegmans, 7-Eleven, Cumberland Farms, Circle K, and Sheetz.

Redbox Instant

Launched in collaboration with Verizon in March 2013, Redbox Instant was a streaming service offering unlimited viewing for $8 per month along with four included disc rentals ($1 additional fee for Blu-ray discs). The catalog featured approximately 4,600 titles from major studios including Epix, Lionsgate, NBCUniversal, Paramount, Relativity Media, and Sony Pictures. Users could rent or purchase content in standard or high definition with options for offline playback.

By June 2013, Redbox Instant expanded availability to PlayStation 4 consoles and released mobile applications for Android and iOS devices. However, new account registrations were suspended in mid-2014 due to concerns over fraudulent credit card use. In Q2 2014 earnings reports, Outerwall—the parent company of Redbox—expressed disappointment regarding subscription performance. Ultimately, Redbox Instant ceased operations on October 7, 2014, less than two years after its debut.

Redbox On Demand

Redbox unveiled Redbox On Demand on December 13, 2017—a streaming service separate from Redbox Instant that does not require a subscription. It provides access to recent releases as well as titles absent from other streaming platforms such as Netflix. Launching with a library of approximately 6,000 titles available for rental or digital purchase (electronic sell-through), the service aligns closely with Redbox’s kiosk rental model. Content is supplied by major film studios except for Disney and Lionsgate.

Redbox Free Live TV

Introduced nationally on February 18, 2020, Redbox Free Live TV is an ad-supported video-on-demand service featuring nearly thirty channels. Among these are three proprietary channels: Redbox Rush (focused on action and adventure genres), Redbox Comedy, and Redbox Spotlight which highlights selected titles. Lionsgate serves as the primary content partner alongside additional providers such as Comedy Dynamics, Fremantle, FilmRise, Gravitas Ventures, TMZ, and USA Today.

Redbox Entertainment

Redbox Entertainment functions as the division responsible for content acquisition and production within Redbox. In April 2019, the company secured the independent film Benjamin for an exclusive 90-day distribution period through its kiosks and on-demand platforms, branding it as a Redbox Original. By October 2019, this segment was officially established with Marc Danon appointed as senior advisor overseeing content acquisition. The division has since obtained exclusive U.S. distribution rights for titles such as Assailant (released March 2022) and Vendetta (released May 2022), broadening its collection of films and television series.

Filmography

in collaboration with Quiver Distribution

in partnership with Vertical Entertainment

with VMI Worldwide

See also

Notes


Further reading

External links

Retrieved from "https://www.alfawiki.org/index.php?title=Redbox&oldid=11436"