The Death of Physical Media Continues as DVD Rental Giant “Redbox” Files for Chapter 11 Bankruptcy
Written by Kameron Bain
In June, Redbox’s parent company “Chicken Soup for the Soul” reportedly filed for bankruptcy With nearly $1 billion in debt on its balance sheet, the company has pushed to liquidate thousands of its “Redbox Rental Kiosk'' found in Walmarts and CVS retail stores across the country in over 29,000 locations. Redbox, at its height, offered one of the only still-standing physical media distributors servicing the major indie studios. As Smart TV Sales Rise and VOD delivery gets easier and easier for streamers and studios alike, a general demand decline in physical media has been at play across the industry for the last few years with the advent of AVOD and SVOD streaming channels.
Physical media competition was strongest in the late ‘90s and early 2000s when the advent of Blu-Ray disk and new home entertainment systems began creating DVD players that could offer high-definition viewing experiences. These DVDs later became 2K movies, then 4K movies, and special presentation formats like UHD. The highest-selling DVDs were respectively centered around the highest-grossing theatrically released films during those times. When we look at the unit sales of Frozen (2014) with 7.79 million units sold compared to Avatar (2010) with 7.62 Million Units Sold; we can see the financial power of physical media when movies could live entire second lives in the big box retailers like Walmart, Best Buy, and other brands even years after the movie was released! The writing has been on the wall for years.
In 2019, The Avengers End Game (2019) was released on Blu-Ray with only 3,803,740 units sold with $83,907,696 in estimated revenue. Keep in mind here that Disney+ would have been launched just a few months later in November 2019, marking the end of Disney’s interest in physical media after their most successful film of the year barely moved off of the shelves with the DVD release window. Last year Super Mario Bros (2023) barely sold 450K units for DVD despite it being one of the highest-grossing films released that year and with these two hugely successful movies unable to generate traction in retailers with physical media sales, the biggest studios who used DVDs sales to grab some extra cash from retailers divested from physical media channels all together after 2023, leaving indie films and games in its place. Last year, major retailer Best Buy officially ended its physical media sales (excluding Video Games) stating “To state the obvious, the way we watch movies and TV shows is much different today than it was decades ago,”.
Netflix pulled fully out of the DVD rental business during the SAG/WGA strike in 2023. At the time, Netflix was charging $8 per month for usage of the Netflix DVD rental service pushing out millions of DVDs per month to its subscribers. In direct competition with its Blockbuster competitor in the early 2000s, the rental DVD market made sense, but now that every phone, computer, smart TV, and tablet could stream Netflix movies in 4k, there was virtually no need to continue to support this format. Netflix currently supports about 270 million paid subscribers currently on the platform and with new shows and movies coming to the platform every month, they now have completely cut out the need for physical media production in exchange for directly uploading content to their own servers in 100s of different languages at the click of a button and a fraction of the cost.
Source : Courtesy of Amazon Prime Video
With Rebox’s parent company’s stock closing at $.02 at the end of June (Ticker: CSSEQ), it’s safe to say that this physical media giant is on its last breath with no one left to attend its funeral but the independent filmmakers who supported them in their last days. While the company’s debt load is reminiscent of a real estate company, physical media distribution deals have always been a valuable source of ancillary rights for many Black-centered films as a way to offset the investment risk of releasing movies with all Black casts in niche markets. At its height, “straight to DVD movies'' have often given Black and Latino-centered stories a roadmap to additional distribution and funding even when major Hollywood Studios deemed some of these movies too risky for a worldwide theatrical release.
What started out as a “dirty word” in the late 90s became what we now know as the indie Black film market that launched the careers of producers like Tyler Perry whose early “straight to DVD” stage plays injected themselves into these small distribution channels as a means of additional revenue for the studio. Will Packer’s first production used this method of distribution with his first movie Trois (2000) after it generated almost 5x its $200K budget premiering only on 20 screens in the US. While Trois (2000) made a splash in its limited release at the box office, it later was released on DVD with Colombia Tri-Stars in the US and Argentina, going on to make a few additional sequels after the fact. It’s these types of additional methods of physical media distribution that put some of these (at the time) smaller producers into a mainstream audience of DVD buyers through retailers and DVD rental houses. Physical media deals were able to provide the smaller films with the extra financial backing needed to greenlight them in the first place with the anticipation that if the film didn’t perform at the box office, it could perform in the DVD sales, on linear through syndication, and in the DVD rental market.
“I’d see great films at festivals that never had a life after the festival, before these straight-to-video deals”
Redbox, while it still gave priority to big IP and franchise movies and games for physical media rentals, worked with aggregators to distribute movies on their new free streaming service in an attempt to supplement that low physical media demand and expensive overhead cost for acquisitions; none of this was enough to save the company. There were many concerns surrounding the industry's move to fully digital platforms in film and this loss is just another blow to the already struggling indie film industry. As Black filmmakers start to embrace streaming platforms like Tubi and Amazon Prime, many can really leverage the B2C / VOD relationship that the entire film industry is shifting to. While film preservation and archiving is still a concern for many historic film preservationists, this new digital method of distributing and shooting films has given voice to hundreds of new indie production companies across the world.
Do you think the death of physical media is a step in the right direction?