Chicken Soup for the Soul Entertainment Inc. reported rising sales as the number of theatrical releases increased at Redbox kiosks, but increasing net losses.
The owner of Redbox and Crackle reported net sales of $110 million for the three months ended March 31, compared to net sales of $29 million a year ago. The company reported a net loss of $58.6 million, compared to a net loss of $14.1 million a year ago and $56.3 million last quarter.
Among the business highlights, the company signed FAST deals with AMC Networks, Fremantle, Revry and Love Stories TV to expand channels such as The Walking Dead, Portlandia, Supermarket Sweep And The Jamie Oliver Channel to its FAST content on Redbox Free Live TV.
In addition, the company signed a deal with Amazon Publisher Services to integrate new advertising technologies, including shoppable ads, into its Redbox, Crackle, and Chicken Soup for the Soul apps.
“Our first quarter was in line with our guidance,” said William J. Rouhana, Jr., chairman and CEO of Chicken Soup for the Soul Entertainment. “As we saw in March, when new release movies appear consistently on our newsstands and our TVOD service, we expect consumers to start renting again. From the second half of May and for the next few months, we will have an average of two or more new release titles per week, many of which will be major releases. As a result, we expect a significant increase in rental at our Redbox kiosks.”
Overall, Rouhana highlighted a streaming landscape that he believes benefits FAST services and companies like Redbox.
“The media landscape continues to shift and pull in a way that pushes more people to use free ad-supported streaming. I’m sure you’ve all seen the news come from media revenue, with studios now simultaneously removing content and raising the prices of their subscription services, forcing consumers to pay more for less. In most of these cases, it pays for the privilege of viewing ads,” Rouhana said.
The executive said the company had now reached “a steady state” of movie releases, as of Tuesday Ant-Man and the Wasp: Quantumania, Than Creed III And Shazam! anger of the gods, followed later in May by Dungeons and Dragons: Honor among thieves.
He highlighted 11 theatrical releases in June and eight in July, including Scream VI and are you there God? I’m Margaret.
The company continues to evaluate new cost-cutting methods, including evaluating assets that the company can sell or partner with other companies to raise additional cash.
Chicken Soup for the Soul Entertainment has already cut costs, delayed executive bonuses to tie them to free cash flow expectations, and licensed $8 million worth of content. The company plans to cut back on its content spend in 2023, with a target of $19 million in content costs by 2023.
