BlockbusterDAO Wants to Raise $5M to Crypto Crowdfund a Netflix for Web3

A couple of weeks ago, some history buffs raised more than $40 million via a crypto crowdfunding mechanism called a DAO with the goal of purchasing an original copy of the U.S. Constitution, offering cryptocurrency tokens that would let the holder vote to do, well, something with it.

Now a group is trying to catch that zeitgeist wave to raise $5 million to buy the video rental zombie brand Blockbuster and turn it into a crowd-governed streaming movie-rental service —and eventually a “powerhouse in the future of the film industry.”

In a Christmas Day Twitter mega-thread, BlockbusterDAO announced that its “mission is to liberate Blockbuster and form a DAO to collectively govern the brand as we turn Blockbuster into the first-ever DeFilm streaming platform and a mainstay of both the Web3 brands and products.”

Let’s pause to parse that sentence.

First, a DAO is a decentralized autonomous organization, the cryptocurrency-based governance structure at the heart of decentralized finance, or DeFi. In a DAO, anyone who holds its native cryptocurrency — called a governance token, votes on any and all decisions, from updating code to allocating funds. BlockbusterDAO’s token will be called a BlockHead.

See also: PYMNTS DeFi Series: Unpacking DeFi and DAO

A DeFilm streaming platform basically means a decentralized version of a blockchain-based streaming video platform. This is not a new use of the technology — competitors include platforms like Flixxo and Theta, while decentralized video platform Livepeer raised $20 million in July.

Web3 is a blockchain-based, privacy-focused version of the existing web that would liberate content and content creators from the grasping hands of Big Tech — or so the argument goes. It’s a serious idea with serious backers like Andreessen Horowitz’s a16z crypto VC wing, and doubters like Tesla CEO Elon Musk and Twitter founder and Square CEO Jack Dorsey.

Read more: Musk, Dorsey Hint VC Money Puts Web3 Vision at Risk

Dreaming Big

While Constitution DAO was pretty vague about what they would do with the document (before a determined billionaire beat them out) BlockbusterDAO’s pitch has plenty of detail — at least in the grand vision department.

After noting that the brand is owned by Dish Network, the BlockbusterDAO creator — who goes by the Twitter handle @Tasafila — said: “It’s time to liberate the brand from purgatory and give it a new lease on life. A brand of the people should be owned by the people and governed by the people.”

And if the Gettysburg Address language wasn’t grandiose enough, he added that it is “time to build a massive DeFilm project that will revolutionize the creative decision-making and financing of the film and television industries forever.”

Intellectual property would be owned by the DAO, funds to buy the content on the film festival circuit would be come from a vaguely described “NFT presence” — and, one would assume, the sale of BlockHead tokens — and once a library of films has been built, its value could be tokenized to fund more projects. Original films could be funded by dedicated token sales, and the cast and crew given equity — those tokens — in the project.

And that’s where the idea of a project that could “change the face of the film industry” runs into the reality of a DAO.

As Tasafila says, BlockbusterDAO would “need confirmation from the DAO on what projects to invest in, and how much budget we can allocate toward it.”

Which is to say, the content buying process — the decision-making on what to buy — would be crowdsourced. Speed issues aside, the project relies upon a large group of investors knowing what the public wants to see.

At a large enough scale, that makes a certain kind of sense — eventually the voters are the viewers. But whether a film library that will compete with Netflix and Amazon Prime can be built based on what a small crypto community wants is another question.