Redbox, known for its DVD kiosks and on-demand streaming service, is set to be acquired by Chicken Soup for the Soul Entertainment, the companies announced in a joint statement on Wednesday.
The all-stock deal is worth $375 million, which includes the assumption of $325 million in Redbox debt and $50 million in stock from Chicken Soup for the Soul Entertainment. While the brand is typically associated with self-help books, Chicken Soup for the Soul also owns several TV streaming services, including Crackle, FrightPix and Popcornflix. In addition, the company creates and distributes video content through its subsidiaries, 1091 Pictures and Screen Media.
Rather than target viewers with a higher-priced subscription service similar to Netflix or HBO Max, the new venture is meant to focus on expanding an ad-supported video streaming option for customers at a low cost, or for free. According to the press release, Redbox has 40 million Perks members and owns 38,000 kiosks nationwide, and the deal will enable them to increase their combined customer base.
“By joining forces, we will accelerate Redbox’s transition from a physical to high growth digital media company and be the only entertainment provider truly focused on value for consumers,” said Redbox CEO Galen Smith.
In early 2021, Redbox said that it had lost $140 million in revenue, citing the pandemic and the lack of new theatrical releases as factors. In April 2022, the media brand laid off 10% of its workforce, according to a filing with the Securities and Exchange Commission.
The new merger is expected to close in the last half of 2022. Consumers will likely see titles from Screen Media streaming on Redbox along with films, TV shows and originals from other Chicken Soup for the Soul-owned properties, including Sonar Entertainment.