NEW YORK (Reuters Breakingviews) - Take a Lamborghini, a few movie stars and a dash of Bacardi, and infuse it all with the scent of cryptocurrency riches. With this cocktail, Italian film producer Andrea Iervolino hopes to revolutionize the entertainment industry. He’s building a social-media platform to take on the likes of Netflix and Facebook, and has raised $575 million through a private sale of tokens. The money was the easy part.
Iervolino runs film-production company AMBI Media with Monika Bacardi, whose late husband was a member of the rum-making family and who’s backing his TaTaTu venture to the tune of around $100 million. They aim to capture the zeitgeist in crypto and social media.
TaTaTu will depend on advertising to enable consumers to watch free of charge. But to draw distinctions with Facebook, which let a UK political consultancy access information on millions of its members, the crypto issuer will be “fair and transparent,” according to its white paper. It will be open about the advertising relationship and will reward viewers as well as content creators with its TTU tokens. The outfit plans to launch its app next month with basic movies, music and sports, then gradually introduce advertising, celebrity pages, and viewer commentary and sharing.
Media consumption habits have changed dramatically, with streaming turning Netflix into a $180 billion giant and cord cutting prompting cable operators to seek content deals, like Comcast’s challenge to Disney in the bidding for parts of Twenty-First Century Fox, which has already hit $71.3 billion. The flux creates potential openings for new entrants.
Yet Iervolino faces long odds. His film credits to date have been mostly of the straight-to-video variety. TaTaTu’s first production, a planned biopic of auto pioneer Ferruccio Lamborghini starring Antonio Banderas and Alec Baldwin, sounds like a crypto inside joke. Last month a cryptocurrency exchange ostentatiously parked three Lamborghinis outside a Manhattan crypto conference as a publicity stunt, equating coin riches with the Italian sports car.
Raising over $500 million is impressive, but that’s a pittance compared with the $8 billion Netflix will spend this year on programming - and Reed Hastings has nearly 120 million customers paying for his content. Iervolino also has to solve a conundrum that’s stymied most so-called utility tokens like TTU. It’s designed to foster activity on the platform, but if it ever becomes highly valuable like bitcoin, users will want to hoard rather than spend it. This looks like a Hollywood tale without a happy ending.
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