OAKBRROK TERRACE, Ill. -- Outerwall Inc. is shutting down its Redbox operations in Canada as the business is not meeting internal performance expectations, the kiosk company announced with its fourth-quarter and full-year 2014 earnings.
Following the final shutdown of the operations in Canada, which includes approximately 1,400 units, the company said it expects to report Redbox Canada results as a discontinued operation.
Most of the kiosks and their contents are expected to be removed and returned to the United States by the end of March, according to a report by the Canadian Press.
The last date for rentals will be Feb. 13, with the last return date on March 5, Mark Horak, president of Oakbrook Terrace, Ill.-based DVD rental kiosk company Redbox, told the news agency.
Redbox landed in Canada in mid-2012 and set up most of its machines at grocery and convenience stores, said the report.
Outerwall, which specializes in automated retail products and services, announced in its earnings results that it had taken a $1.5-million charge on its fourth-quarter results as a result of the shutdown. It said it expects to amortize the remaining value of the content library and capitalized install costs over a three-month wind-down period.
Physical media has been declining in popularity for several years as more viewers turn to streaming video and video-on-demand options, the report said. Last summer, Canadian DVD rental company Zip.ca shut down its DVD-by-mail operation and removed its rental kiosks from grocery stores in parts of the country.
Redbox Automated Retail LLC, an Outerwall Inc. subsidiary, offers new-release DVD, Blu-ray Disc and video-game rentals through its network of self-service kiosks. Redbox kiosks have rented more than 3.7 billion discs and are available at more than 35,000 locations, including leading grocery, drug and convenience stores, and select Walgreens, Walmart and McDonald's locations. Bellevue, Wash.-based Outerwall offers Redbox entertainment, Coinstar money services and ecoATM electronics recycling kiosks in the United States, Canada, Puerto Rico, the U.K. and Ireland.
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