BlockbusterDAO Hits R3WIND: What's Next After Failing to Buy Nostalgia Brand
BlockbusterDAO sought to buy the legacy video store IP, but said this week that owner Dish Network refused to sell it to a DAO.
The team will continue building a Web3 streaming video and commerce platform under the new name, R3WIND.
ConstitutionDAO fell short of its goal to raise enough money to purchase a copy of the U.S. Constitution at auction, but the effort yielded considerable mainstream attention and showed the world the potential power of DAOs, or decentralized autonomous organizations.
And then it became a meme. Quickly, moonshot DAOs sprung up, proclaiming that they were going to buy other things, too. Krause House DAO wants to buy an NBA team. LinksDAO plans to buy a golf course for its members. SpiceDAO bought the "script bible" for a canned film adaptation of sci-fi novel, "Dune," with plans to make it public and create projects around it.
BlockbusterDAO is another project that launched around the same time to ample media buzz, as the collective aimed to raise $5 million through NFT sales to acquire the near-defunct Blockbuster Video brand from current owner Dish Network. The creators tapped into collective nostalgia, and aimed to transform the faded IP into a new Web3 streaming video platform.
But all of that initial hype and momentum ultimately hit a major roadblock.
On Wednesday, the core team behind BlockbusterDAO announced that after months of meetings, negotiations, pitch decks, and legal consultations, Dish Network allegedly decided that it didn't want to hand over the Blockbuster IP rights, which it purchased out of bankruptcy for $320 million in 2011—to a DAO.
A DAO is an online collective of people who come together with a shared goal or purpose, often with a token used for community governance. Along with DAOs focused on acquiring things, there are DAOs that invest in digital fashion or NFT artwork, raise funds for charitable aims, govern decentralized protocols, and more.
… (Since 2013,) sentiment has improved from a score of -20 to positive 14. In other words, people's feelings for Blockbuster turned positive once its stores were gone."https://t.co/XYnDrM92ay
— R3WIND (@R3WINDxyz) December 26, 2021
Blockbuster had been a video rental giant from the late 1980s into the early 2000s, but stumbled amid the Netflix-driven shift to streaming media. Just one Blockbuster franchise store remains open. The DAO believed that the distressed brand could be bought for less than $5 million, citing a reported lowball valuation of $1.8 million from entrepreneur Tai Lopez.
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"There was definitely a real shot at making this happen," pseudonymous BlockbusterDAO steward Gugz, who said he's a television and film producer, told Decrypt. "We had lots of productive conversations with [Dish]. At the end of the day, I think it's just that the two visions weren't aligned."
In a blog post, the BlockbusterDAO team described in detail the process of pitching Dish Network on its plans and working through multiple scenarios, including the potential creation of a limited liability corporation (LLC) co-owned by Dish that would be progressively decentralized over time.
Ultimately, according to the BlockbusterDAO team, Dish Network gave the final verdict on May 31, allegedly claiming that it "did not want to license the brand to a DAO." Dish Network representatives did not respond to multiple inquiries from Decrypt.
"They wanted to remain in the driver's seat in terms of controlling that brand," Gugz told Decrypt. "Although we were disappointed, we understand their point of view."
Be kind, R3WIND
The most prominent goal of the planned DAO community—acquiring the Blockbuster brand—has been dashed. But rather than pack it in and move on, the contributors are keeping up the aim of launching a Web3 streaming video platform called R3WIND.
An apparent nod to Blockbuster's "Be Kind, Rewind" slogan from the VHS era, R3WIND is envisioned as a creator-friendly platform that's described as "Vimeo meets Shopify with best-in-class organic marketing." Users will be able to upload or import videos and then tie them to storefronts with NFTs and physical merch alike, with the platform governed by a DAO community of token holders.
It's designed to let Web3 creators harness and monetize their communities of fans without relying on centralized platforms, which take sizable fees and potentially limit their reach. Meanwhile, a "share-to-earn" element means that fans can earn token rewards by sharing their favorite videos and creators and generating sales.
"We feel incredibly validated by the mission that brought us together, which was creating a decentralized streaming service," said pseudonymous BlockbusterDAO founder, Tasafila, who said that he's an entrepreneur who works in e-commerce.
"Obviously, the details and the execution of that have changed over time, and probably will [continue to]," he added. "What great startup doesn't have a few good pivots in them?"
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The R3WIND members pointed to pain points for creators in current centralized video platforms. Such sites and apps take a significant cut of ad revenue, and use opaque algorithms to surface (or bury) content. There's also a feeling among creators that they have to constantly grind to churn out new content, or they'll be ignored by the algorithm.
"I personally know tons of creators who have just burned out," said Gugz. "They cannot keep up with the volume, and the art suffers because they can't focus on the work."
R3WIND plans to tap into the burgeoning "Film3" market, as decentralized film production models are gaining steam. Web3 startups like Roman Coppola's Decentralized Pictures and FF3 are using token-driven models to give fans a say in which projects are made. R3WIND could similarly benefit creators while letting DAO members help shape the platform's future.
"Let's be honest about how we came to life: It was via a tweet," said Gugz. "This massive community came together because everybody felt the same thing, and sort of had the same general vision: Let's build something that makes the world more equitable for creators."
"We're not so naive as to believe that that vision alone holds the community together forever, right? It's a starting place," he continued. "We are so much more than just a vision. We're an incredible team, and we're going to build a product."
Moving past the meme
BlockbusterDAO is officially no more, with R3WIND branding taking over its social channels alongside the announcement of the pivot on Wednesday. "That was one aspect to our story," said Tasafila of the Blockbuster initiative, "and probably, mostly, a thing of the past."
Wherever R3WIND ultimately goes from here, it's likely to carry that shadow of the potentially brief era in which DAOs sprung up with grand—and in some cases, perhaps overly ambitious—aims to collectively own and operate things. Has the trend of DAOs launching to purchase pricey brands, teams, or physical items run its course?
BlockbusterDAO isn't the only one to pivot, either. Krause House founders told Decrypt in May that they still eventually aim to buy an NBA team, but in the meantime, they've started with a team in rapper Ice Cube's 3v3 BIG3 league. SpiceDAO has reportedly encountered issues with its plans around the Dune "story bible," and may be shifting plans, per The Verge.
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"When we started out, especially when you look at the news coverage, it was hard not to kind of lump us into the 'meme DAO' box," Tasafila admitted of BlockbusterDAO. "The story was very meme-ish, and it gained a lot of incredible traction."
Despite the stated $5 million funding goal, Tasafila and Gugz said that BlockbusterDAO never raised a dime. The core team was still trying to convince Dish Network to sell the IP over the past months, all while developing the premise behind the planned Web3 video platform.
"In December 2021, we could have dropped an NFT and raised millions of dollars. I'm very confident of that," Gugz explained. "We just didn't want to be the group that was taking people's money at a time when we did not know how to spend it."
WAIT, WHAT IS SHARE-TO-EARN ?? 👀
S2E is a way to activate your community and fans. Anyone can connect their wallet, generate a unique link to your content, share it across the internet, and earn whenever it leads to a purchase. pic.twitter.com/YSAxhG2CFs
— R3WIND (@R3WINDxyz) June 29, 2022
As R3WIND, the contributors suggest that they've evolved past the "meme DAO" label, and that they're serious about building a Web3 streaming video platform. They've developed a 20-year plan as part of a community brand sprint, and they plan to raise capital and establish a formal DAO structure to let users govern the platform, contribute to R&D work, and more.
As for other DAOs that did raise funds for moonshot goals, which have either been changed or remain out of reach (at least for now), Gugz suggested it's too early to tell. He likened them to any other kind of startup—many will fall short, he said, but some may eventually thrive.
"What is their legacy? I don't know. I think most of them, purely statistically, won't make it—but that goes for any startup organization," he said. "I don't think that's specific to DAOs. Some of them, before their treasuries run out, will find their way and they'll do something meaningful."
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