Redbox has shut down and left customers out of work because the company has gone bankrupt

If you use Redbox's streaming service, you may have noticed that you're unable to stream your purchased movies or the free collection of movies they offer. This morning, Redbox's website stopped working. It's now just displaying an error message where you would normally find free movies and movies or TV shows on sale.

At the moment, the problem appears to be limited to Redbox, as Crackle, which is owned by the same company, is still working. The exact cause of the problem is unknown and Cord Cutters News has contacted Redbox for comment. We will update our story if we receive a response.

However, for now, if you have movies on Redbox streaming services that you purchased, you'll have to wait and see what happens. Presumably, this is a technical glitch as the company recently received $8 million in new funding.

Last month, Chicken Soup for the Soul Entertainment, the parent company behind Redbox, Crackle, and the streaming service of the same name, announced that it had fired the entire board of directors and board of managers of each of the company’s subsidiaries except for William J. Rouhana, Jr. This was quickly followed by news that Redbox was filing for bankruptcy.

Now, according to a report from Bloomberg, HPS has agreed to pay the company $8 million, but as part of the deal, Redbox's parent company must reinstate the independent members of its board who were fired last month. Now the judge overseeing the bankruptcy has agreed to the plan.

Earlier, the employees were not paid salaries and facilities like health insurance were cancelled. With this loan, the employees will get salary and health insurance will also be financed.

Recently, the company defaulted on a $4 million payment to NBCUniversal in royalties. Now, questions have arisen about the company's future, with it potentially being ordered to pay NBCUniversal $16.7 million in backpay. NBCUniversal filed a lawsuit saying Redbox was not paying royalties. The company agreed to a payment plan but missed the first payment.

Chicken Soup for the Soul Entertainment is in a tough spot after buying Redbox for $50 million in stock in 2022 and assuming $325 million in debt. Add in a volatile media environment with declining ad revenue and quarterly losses, and the company's future is completely uncertain. In August, CEO Rouhana said the company was conducting a strategic review to evaluate its opportunities, which is business language for putting itself up for sale.

Last year, Chicken Soup for the Soul Entertainment announced it was in active discussions for a potential sale, but nothing has come of those talks so far.

Like many media companies, the company has been hit by a soft advertising market, which has negatively impacted revenue. For a company that relies heavily on ad-supported streaming, this market is bound to have a negative impact on the service. Right now, the company is confident that they will be able to work through these issues and pay their partners. We'll have to wait and see what happens.

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