One of Netflix’s rivals is trying to buy a DVD rental division that is about to close.
Behind Hollywood reporter (opens in a new tab) (THR), Redbox – a movie-on-demand (VoD) and DVD rental company – has expressed interest in buying the DVD-oriented portion of Netflix. The revelation comes less than 48 hours after Netflix confirmed it was shutting down its DVD rental business in September 2023 after 25 years of operation. It was Netflix’s DVD rental service that put it on the map and ultimately paved the way for Netflix to reinvent the way we watch content at home, ushering in the streaming era.
So if the world’s best streaming service is abandoning its DVD leasing platform and Redbox wants to buy it, what’s the problem? In short: Netflix does not appear to be interested in selling this part of the company to a rival.
Speaking to THR, Bill Rouhana – CEO of Chicken Soup for the Soul Entertainment, which owns RedBox – said: “I’d like to buy it. I wish Netflix would sell me this business instead of shutting it down. I’ve tried three or four times to contact the corporate development people about this, but each time I’ve been turned down. So when I saw it was closing, I thought, “Well, maybe they’ll do it now.”
Netflix has neither confirmed nor denied whether it would eventually be open to selling its DVD leasing service to Redbox. However, based on Rouhana’s answer to THR’s question, it doesn’t sound like he’s confident that a deal will be reached this time. We’ve reached out to Netflix for comment and will report back if we get a response.
Founded by former McDonald’s executive Gregg Kaplan in 2022, Redbox has become one of the world’s leading DVD rental companies. Currently, the VoD/DVD oriented organization owns 32,000 red DVD kiosks across the US, and despite its parent company reporting a loss of $56.3 million in the fourth quarter of 2022, nexttv.com), 1,500 more kiosks will open in Dollar General stores this year.
Unnecessary acquisition or (potentially) winning strategy?
It seems odd that Redbox wants to buy Netflix’s DVD rental company. With the latter due to ring in late 2023, Redbox’s main competitor in DVD rental will be gone. Kaput. Finished. It will then have free reign over the DVD rental market.
And Rouhana already knows this, telling THR: “This could be a great boon for us because now there’s a whole bunch of people looking for a new place to put their DVDs, and we’re approaching 90 percent of them based on our newsstand locations.”
If that’s the way it’s supposed to be, why bother spending a fortune adding Netflix’s DVD rental department to Redbox? If Redbox’s reach is as broad and effective as Rouhana suggests, it already has a sizable library of content to make available to its nationwide user base.
Well, maybe Redbox has plans to bring its services to a global audience. For example, the Netflix DVD rental platform has never been available in the UK. Had Redbox taken over Netflix’s DVD leasing service, it would have had a much larger stack of physical media to distribute to more people. If Rouhana’s ambitions extend beyond North America, she may start offering her Redbox service overseas – unless of course it turns out to be too expensive.
Regardless, neither Redbox nor Netflix will suffer financially if the latter refuses to sell its DVD rental business to the former. Chicken Soup for the Soul Entertainment’s revenue tripled to $113.6 million in 2022, driven largely by its acquisition of Redbox later that year. Meanwhile, Netflix brought in a staggering $8.16 billion in the first quarter of 2023, despite the threat of subscription cancellations, as Netflix password sharing will roll out globally in the coming months.
Of course, adding massive hits like Night agent AND Wednesdayto his back catalog, helped her recover from a tumultuous 2022. You can see what other great shows and movies are available on the streamer by reading our best Netflix shows and best Netflix movies guide.
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