Watching movies at home on video recording systems became a part of the American lifestyle after Sony launched the Betamax video system in 1975. Two years later, JVC introduced the video home system, or VHS, in the U.S. after first releasing the technology in Japan.
Since the VHS system provided double the recording time than a Betamax, it was considered by consumers as superior, even though the picture quality wasn't as good, and became the standard for home video systems, according to Kodakdigitizing.com.
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The popularity of home video systems led to a proliferation of video rental stores and the launch of Blockbuster Video in 1985 and its top competitor Hollywood Video in 1988.
The VHS industry dominated the home video market through 1980's and into the 1990's until Japanese electronics firm Pioneer launched the DVD video system and brought them to U.S. consumers in 1997. By the mid 2000's, DVDs had overtaken the VHS format and the final Hollywood movie produced on VHS, "A History of Violence," was released in 2006.
Movie fans might soon see the final Hollywood film produced on DVD in the next few years, as the format's popularity is dying as video streaming has become the standard for video presentations.
With the VHS format disappearing and DVDs fading away as streaming was developing in the mid-2000's, Hollywood Video's parent Movie Gallery in February 2010 filed for Chapter 11 bankruptcy and two months later converted to Chapter 7 and liquidated.
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Blockbuster followed that trend and filed for Chapter 11 in September 2010 with about $1 billion in debt and closed all of its stores in August 2014.
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Redbox will close all kiosks in Chapter 7 liquidation
The demise of the DVD industry may have just reached its conclusion as the parent of DVD rental company Redbox and 19 affiliates on July 10 obtained a court order to convert its Chapter 11 bankruptcy to Chapter 7 liquidation.
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Judge Thomas M. Horan of the U.S. Bankruptcy Court for the District of Delaware signed an order converting Redbox parent Chicken Soup for the Soul Entertainment's case and requiring the debtor to turn over all records and property of the company's estate to a Chapter 7 trustee to facilitate a liquidation and winddown of the debtor.
The debtor listed $500 million to $1 billion in assets and liabilities in its petition when it filed Chapter 11 on June 29. Its latest financial data as of March 31, 2024 listed over $414 million in total assets and over $970 million in total debts, according to the petition.
Redbox, which Chicken Soup for the Soul Entertainment acquired in 2022, operates a network of about 24,000 DVD rental kiosks across the U.S., according to declaration filed in its Chapter 11 case. The debtor also operates Redbox Free Live TV, a free ad-supported streaming television service, as well as three other advertising-supported video-on-demand streaming service brands: Redbox, Crackle and Chicken Soup for the Soul.
When Chicken Soup for the Soul Entertainment acquired Redbox in 2022, it started out with a huge debt as it assumed about $359.9 million indebtedness under a pre-petition secured facility. The news got worse as the company reported net losses of $111.2 million in 2022 and $636.6 million in 2023.
In a June 2024 Securities and Exchange Commission filing, the debtor said that it might need to file bankruptcy if it didn't secure additional funding.
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