Blockbuster DAO Debuts on the Blockchain
A DAO wants to buy Blockbuster and turn it into a decentralized film streaming service. As it turns out, Blockbuster isn’t going to work out.
Blockbuster is one of the legendary U.S. video rental stores that made the experience of watching films in your own home, quite simply, awesome. However, Blockbuster has been having a tough time surviving in the era of Netflix and digital distribution. In response, Blockbuster teamed up with the Digital Entertainment Content Ecosystem (or DEX), an Ethereum-based DAO that wants to bring Blockbuster back to the US.
Blockbuster The Internet’s Premier Video Store
Blockbuster, which launched in 1990, was at the forefront of the digital era. The company pioneered the concept of online movie rentals with its website. The company was also one of the first to make it possible for movie renters to rent a video title from an iPad.
It’s not just the name that makes Blockbuster legendary. The company is also responsible for releasing films like Ferris Bueller’s Day Off, The Karate Kid, and Indiana Jones and the Last Crusade. In its heyday, Blockbuster was often called the “No. 1 Blockbuster in the World,” and attracted movie goers with generous 50-day rentals.
There are even Blockbuster locations in some cities where tourists and locals could rent videos at discounted rates. That being said, Blockbuster has been facing fierce competition from online streaming services like Netflix. At one point, Blockbuster’s annual revenue decreased to $1.3 billion, a dramatic plunge from its peak of $6.9 billion. In an effort to survive, Blockbuster has been looking to the blockchain as one potential solution.
Blockbuster, The Digital Economy’s Most Exciting Start-Up
The Blockbuster Ethereum-based DAO is essentially a decentralized version of the company. The system works through smart contracts that execute transactions with the goal of making Blockbuster profitable again. The DAO has raised more than $4 million since it was announced last month.
As of right now, the Blockbuster Ethereum-based DAO is looking to buy Blockbuster. The plan is for the company to re-invent itself in a decentralized way. This will include “expanding its footprint into multiple markets, and developing cutting-edge streaming and delivery services for consumers,” according to the website.
While the mission is noble, it appears the blockchain-based Blockbuster will run into some trouble. For starters, Blockbuster isn’t profitable. So why would investors want to put their money in a company that can’t make money? Blockbuster has reportedly lost money every year since 2013.
Things also aren’t looking great for Blockbuster’s management. Last year, the company’s president stepped down to create a blockchain-based publishing company. It’s unclear whether he ever came back, but Blockbuster’s head of marketing, Ben Sandwell, resigned in March to work on a startup called Pocket Fire.
The company was forced to restructure its business and it’s making it difficult for investors to get paid. The company has canceled some of the rewards for donating to the DAO. In fact, for every dollar invested in the DAO, Blockbuster will only get $0.07. This is likely why people are hesitant to put their money into the deal.
But the Blockchain’s Role in The Future
If the Blockbuster Ethereum-based DAO ends up succeeding in its efforts, it will demonstrate the importance of the blockchain in the future. As part of the blockchain’s decentralization, the transactions in the Ethereum network are transparent. This means anyone can check the status of a transaction and view any possible contract failures.
If Blockbuster is able to get back on track, it would be a huge step in the right direction for the blockchain’s transition to a new economy. It would also be a victory for blockchain’s philosophy that money should be made by actual people, not companies.
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