Redbox President Mark Horak is leaving the shrinking DVD kiosk business after less than two years at the helm, according to an SEC filing.
He will be replaced by interim president Erik Prusch, who was recently appointed the CEO of Redbox’s parent company, Bellevue-based Outerwall. The company has already started searching for a permanent replacement.
The SEC filing also reports that Outerwall Chief Accounting Officer Peter Osvaldik has left “to take a financial reporting position at another company in the region.”
The news comes as Redbox stares down an uncertain future, with even company executives admitting they’re riding the tail of the DVD industry. Outerwall tried to pivot the business into the world of video streaming last year, but that venture fizzled out without much success.
In the meantime, the company continues to see less interest in DVDs. It shut the Redbox business down in Canada and has been pulling back on underperforming kiosks across the U.S. Redbox revenue declined by more than 9 percent last quarter, while he number of rentals dropped from 171 million in Q3 2014 to 133 million for the same time this year.
Outerwall has continued to search for a new kiosk business to make up for Redbox’s declines, but so far nothing has caught on. The company’s stock is trading down 22 percent from the start of 2015.
Update: Following Monday’s news release, which included decreased earning expectations for Q4, Outerwall’s stock took another 22 percent dive in after hours trading. The stock was priced at $44.95 on Monday afternoon, down more than 40 percent from where it started the year.
Outerwall brought on Prusch, the former CEO of Clearwire, to right the ship in July.
In a press release announcing Horak’s departure, the company said Redbox has “not met the company’s performance expectations,” but it’s still committed to “build upon its strong brand and foundation and position the business for continued success.”
“We appreciate Mark’s contributions to the company and remain confident in Redbox’s position,” Prusch said in the release. “While consumers’ rental patterns have not returned to the levels we had expected by this time, Redbox continues to be a compelling, valuable entertainment option as the largest movie transaction service in America.”
The company declined to comment beyond the press release.
Horak, who officially left the company last week, first joined Redbox as president in February of 2014. He was appointed after former president Anne Saunders left amid broader changes that included shutting down three fledgeling kiosk businesses and cutting 251 jobs. Saunders also led Redbox for less than 2 years.