On the heels of Chicken Soup for the Soul Entertainment’s acquisition of Redbox Entertainment, Redbox CEO Galen Smith, in a memo to employees, said the transaction would in part help the legacy DVD rental kiosk vendor transition to ad-supported streaming video distribution.
Chicken Soup, which owns and operates Crackle Plus, one of the original AVOD streaming platforms, is set to acquire Redbox in an all-stock transaction valued at $375 million.
Galen said Crackle Plus would “perfectly” complement Redbox’s legacy business as well as newer digital offerings. Launched originally in Canada in 2004 as Grouper, Sony Pictures Television acquired the platform in 2006 and renamed it Crackle. Sony sold the service to Chicken Soup in 2019. Other Crackle Plus streaming platforms include AVOD Popcornflix, Truli (faith-based content), and SVOD Pivotshare.
“Chicken Soup for the Soul Entertainment also acquires and distributes original video content, much like we have started to do through Redbox Entertainment,” Smith wrote in the memo.
The executive characterized AVOD as a “massive market opportunity” in AVOD, with Chicken Soup offering substantial capabilities, including technology and existing advertising relationships, to Redbox.
“Crackle Plus has one of the top AVOD network groups, with more than 40 million monthly active users,” Smith wrote. “Together with Redbox’s 40-million-plus loyalty members, our content library and free ad-supported streaming television (FAST), we’ll be able to offer consumers unparalleled choices for a phenomenal value.”
In the memo, Galen he recognized that many Redbox employees would have questions about the company’s future and their jobs.
“I want to be transparent — we don’t have all the answers today, but we’ll do our best to provide you with what we know,” Smith wrote. “A lot of questions about how the two companies will be integrated are still being made and will be decided over the coming months once the deal has been completed, which is expected to be in the second half of 2022.”
Smith said he plans to address all issues of the corporate merger in a future company Town Hall.
“I encourage you all to join, and we’ll do our best to answer your questions. We’ll also be sharing a list of Frequently Asked Questions to address some we expect you may have. I want to sincerely thank you for all you have done for Redbox. It hasn’t always been easy, but this team is resilient, and we couldn’t have reached this outcome without you.”