Formed in 2019, the entertainment division of the longtime operator of DVD kiosks is an important part of the company’s expansion plan. It is acquiring, producing and releasing a range of genre films, with plans to reach 36 releases a year. It relies on data from nearly 20 years of movie transactions since the company’s emergence to inform its buildout.
Lionsgate will take Redbox films out in home entertainment windows as well as subscription video on demand licensing for select titles.
The deal comes ahead of a planned IPO for Redbox later this month. Pending a few last administrative steps and a shareholder vote, the company should begin trading publicly in a SPAC transaction. The company has indicated an enterprise value of $693 million will result from the combination with Seaport Global Acquisition Corp.
Redbox Entertainment’s recent releases have included Capone with Tom Hardy; Shadow in the Cloud, starring Chloë Grace Moretz and Nick Robinson; and SAS: Red Notice with Sam Heughan and Ruby Rose. Among the films on the upcoming slate are The Last Son, a Western starring Colson Baker (aka musician Machine Gun Kelly) and Heather Graham; Bandit, with Josh Duhamel and Mel Gibson; and Muti with Morgan Freeman and Cole Hauser). Films are pushed across all entertainment distribution points, not just the network of the company’s some 40,000 kiosks.
Founded in 2002 as a purveyor of DVDs and video game discs, Redbox has evolved significantly in recent years. While CEO Galen Smith says the kiosks will continue to play a key role, the company has invested in streaming, with its Free Live TV service. Redbox Entertainment has also become a key area of focus, setting deals with the likes of John Wick producer Basil Iwanyk. His Thunder Road teamed with Redbox in 2020 to launch production label Asbury Park Pictures, a specialist in modestly budgeted action movies.
“Redbox has a large slate of films coming in 2022 and beyond, and we’re excited to work with Lionsgate to identify those that are a great fit for their distribution model,” Smith said. “Ron Schwartz and his team have been terrific partners over the years, and we are excited to extend our relationship to tap into their world class distribution prowess to create value for both companies.”
In addition to providing support for Redbox’s burgeoning entertainment division, the agreement also entails licensing of films and TV series from the 17,000-title Lionsgate library to feed Redbox’s streaming efforts. Redbox has become a rising player in both ad-supported video on demand, or AVOD, as well as free, ad supported television, or FAST. In the FAST strategy, linear channels are made available live, a draw for cord-cutters. ViacomCBS outlet Pluto TV is perhaps the original FAST, and the strategy has been deployed by Roku, Amazon Fire TV, Tubi and NBCUniversal’s Peacock.
“Lionsgate’s longstanding partnership with Redbox has created significant value for both our companies,” said Schwartz, president of worldwide distribution for Lionsgate’s Motion Picture Group. “That collaboration has evolved into a multifaceted distribution relationship across home entertainment, SVOD and AVOD platforms that allows us to continue to diversify our content offering to our consumers.”
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