Redbox is about to shut as the DVD business fades in the shadow of streaming.

DVD rental business After 22 years in operation, Redbox is about to close its doors as the market for at-home entertainment is still dominated by streaming.

Chicken Soup for the Soul Entertainment, the parent company of Redbox, filed for Chapter 11 bankruptcy last month; on Wednesday, it was converted to a Chapter 7 liquidation case. The conversion means that the firm will soon have to dispose off assets in order to pay back creditors since it was unable to come up with a strategy for paying off its existing obligations.

Redbox’s 24,000 kiosks will shut and all staff will be fired off as a result of the case switching to a Chapter 7. According to Deadline, attorneys for Chicken Soup for the Soul said in court that they had searched “day and night” for a way to change the result.

The news has been unsettling, according to a current Redbox employee who requested not to be named because he was unsure of potential legal action that others at the business could take.

He said, “Sentiment’s in the gutter.” “Our coworkers who haven’t paid their rent are in danger of being evicted.”

The worker said that at a town hall meeting on Thursday, employees were informed that they would not be compensated for the hours they had worked so far this month. He also said that layoffs would not become official until a bankruptcy trustee was appointed, which raised questions about when workers would be eligible to apply for unemployment benefits.

The Hollywood Reporter said on Thursday that a Delaware court presiding over the lawsuit said on Wednesday that “there is no means to continue to pay employees.”

Requests for response from Redbox’s attorney and a corporate spokesperson were not immediately answered.

When Redbox first opened its doors in 2002, it caused quite a stir in Hollywood with its DVD rental service, which was then less expensive than purchasing one. However, the 2010s saw a decline in DVD sales due to the emergence of digital services and streaming platforms.

With $325 million in debt, Redbox was purchased by Chicken Soup for the Soul Entertainment in 2022.

By the time the parent business filed for bankruptcy last month, it had accrued $1 billion in debt. It was finding it difficult to pay for its more than 1,000 workers’ health care insurance and to make payroll, according to court filings filed earlier this month.

The newest physical media provider to suffer against the prevalence of streaming is Redbox. A Forbes poll from this year revealed that 99% of American homes pay for at least one service; the remaining 99% depend on free streaming services with ads. Best Buy discontinued carrying tangible media such as DVDs and Blu-rays this year, citing changes in the way people consume entertainment.

According to a recent Nielsen estimate, streaming achieved a record-high proportion of TV viewing in May.