Here’s yet another reminder of the shifting landscape in the entertainment industry. Chicken Soup for the Soul Entertainment, the parent company of Redbox, has filed for bankruptcy. This move shines more light on the ongoing challenges of physical media in the age of streaming.

Deadline reports that Chicken Soup for the Soul Entertainment filed for Chapter 11 bankruptcy protection. The company, an offshoot of the famed self-help book series, amassed nearly $1 billion in debt and struggled to meet payroll and employee benefits obligations.

Recently, the bankruptcy court permitted a transition from Chapter 11 to Chapter 7, which paves the way for asset liquidation, according to the Wall Street Journal.

In 2017, Chicken Soup for the Soul Entertainment went public and embarked on an acquisition spree that included lesser-known digital services like Popcornflix and Crackle.

In 2022, the company acquired Redbox for $375 million. Despite these acquisitions, the company’s financial problems got worse, leaving numerous lenders unpaid. The latest court hearings revealed that even a substantial cash infusion wouldn’t suffice to rescue the company from its debt spiral.

It was also reported that the judge hinted at possible financial mismanagement within the company. CEO Bart Schwartz resigned just weeks after assuming the role, adding to the company’s problems.

Redbox was once a dominant player in physical media distribution, and boasted over 43,000 locations at its peak in the early 2010s. Today, the company claims to operate more than 34,000 kiosks dispensing DVDs and Blu-Rays.

However, reports indicate that many of these machines are now out of service, with some even having their credit card slots taped over.

The downfall of Redbox highlights the decline of physical media. Retail giants Best Buy and Target have already announced plans to cease selling DVDs and Blu-Rays in their stores.

A 2023 report by the Digital Entertainment Group revealed that physical media accounted for only 3.6% of the U.S. home video revenue, marking a 25% decline from the previous year.

While I like physical media, and I still buy Blu-rays, it doesn’t surprise me that it’s on a downward spiral.